Married into Bankruptcy

[longrun]

Hi new member here! I have been married to my wife for little under a year, but we have had a rough year at best. She made some bad and questionable investment, and now is going to loose it all. Since it was all in her name before we got married how will this effect my credit? I dont really like credit and dont have any cards, but living in SoCal one has to realize that buying a house with 100% down is rather far fetched. Any sound advice one could give me on how to overcome this large hurdle? I love my wife very much and she has learned from all this, but we have decided that maybe I should take the reigns when it comes to financial decesions in the house.

I am 26 and have $7,000 in a ROTH IRA. I plan on making the max contribution for this year also. I dont have much debt, but I dont have great credit also. I perfer not to have it. We own 2 cars, with the remaining balance on them being $23,000. Thats kind of it.

The bankruptcy is really hard though. We will fight through it though.

[Ima saver]

I don't know that much, but I hope it won't affect your credit. Has she declared bankruptcy?

[Hypersion]

Talk to a GOOD bankruptcy lawyer. If the debts are only in her name than it should only effect her credit but be carful. How much money are we talking about? Is it enough to make it worth declairing bankruptcy.

[longrun]

It is a significant ammount. I hope it doesnt affect my criedit. If it doesnt what is the worst that could happen?

[b4freedom]

Originally Posted by longrun

It is a significant ammount. I hope it doesnt affect my criedit. If it doesnt what is the worst that could happen?

Don't share any debt with her and it won't hurt you. Go to a lawyer and get a prenuptual.

[longrun]

Why would I want a prenup?

[b4freedom]

Originally Posted by longrun

Why would I want a prenup?

To protect yourself from her debt. You can do prenups mid-marriage.

[longrun]

I thought a prenup was for when you get a divorce? Please explain.

[b4freedom]

Originally Posted by longrun

I thought a prenup was for when you get a divorce? Please explain.

A prenup is to protect both parties involved. It's just a legal way to say, "Her debt/assets before the marriage are hers and mine are mine. And they'll stay that way and can't be combined." Now, legally, what you earn during marriage can be split/shared. So, if she has $100k of debt premarriage, a prenup is made that she keeps it, you get divorced, she keeps it. Otherwise, you get divorced, you get half the debt as well. Now, take it the next step. She goes bankrupt, you're married, no prenup, you get dragged into it as well. If you get divorced with a prenup, she has all the debt, declares bankruptcy, the bankruptcy is based on her earning power (not both of yours), after you the bankruptcy, you get remarried. At least one party has a clean record, you're both in a better position.

And, I know some people will hang me for this, but maybe you want to explore divorce. I have a friend who makes $65k/year. Her husband makes $150k/year. They love each other, but got divorced. Why? Because it saved them $15k+ a year in taxes. Marriage in America is now more about tax status and legal benifits then it is about love. Legally, they don't live together. In truth, they rent an apartment together in NYC, and pick one of two houses to visit on the weekends (poconos or beach). It's a nice life that couldn't be afforded if they were married. Oh, and their kids have no idea that they are legally divorced.

[longrun]

ok thanks. i am not thinking about divorce. I just want to protect my credit.

[Bluezy]

I believe that California is a community property state. I would check with the California Bar Association to find a bankruptcy attorney that does Pro Bono (free) work and ask about your spouse's debt and individual bankruptcy of a community spouse.

Good luck to you!

[debtdude]

My wife declared bankruptcy years before we met. It was due to her ex-husbands actions. Therefore, I never had my credit affected. However, I can tell you what happens.

You get about seven years of explaining why you had to declare bankruptcy whenever the subject of refi'ing a loan, getting a load, applying for financial assistance...pretty much anything having to do with money. While I don't she was ever discriminated against for her bankruptcy due the to reason for declaring, it was an emotional strain on her.

After 7 years, you find your mailbox is full of credit card offers.

As far as a prenup...if you are married and really love her, you know that what is hers is yours and yours is hers. Until you have kids and you here "do you know what YOUR child has done?" Seriously, marriage is two becoming one. You get the good, the bad, and the in-laws.