One of the most common questions is, “Will my spouse be affected if I file Bankruptcy?” In both New York and New Jersey the simple answer to this question is “No”. However, it is important to understand that a spouse may still be liable for the debt if they co-signed for the debt.
Many times people tend to be confused on what exactly a co-signer is. Just because both names are on a credit card does not mean that your spouse will be liable for the debt included in your Bankruptcy filing. An authorized user is not the same as a co-signer. An authorized user on a credit card is not liable for their spouses debt after they file Bankruptcy. An authorized user is not someone who opened the account and it is not their account. They are just permitted to use the credit card.
On the other hand, if a spouse did co-sign for the debt then they will still be liable the debt after the filing spouse’s Bankruptcy. Thus, it is important that during and after the Bankruptcy the non-filing spouse continues to make payments to the creditor.
It is also important to understand how a spouse’s credit score may become affected if they co-signed a debt even though they are not filing for Bankruptcy. Sometimes during the process of Bankruptcy creditors make a notation on the account that it is in Bankruptcy. This may show up on the non filing creditor’s credit report. It is important to understand that although this may show up on the non filing spouse’s credit report this does not by any means mean that the spouse’s credit score will be affected. As long as the non filing spouse continues to make the payments timely then it should not affect their credit score. Further, it is important to note that a non filing spouse can also contact the credit reporting agency and dispute this.
If you are considering filing bankruptcy and want to ensure that your spouse’s won’t be affected, then talking to an experienced New York or New Jersey bankruptcy lawyer is important.
For answers to this question and more questions about bankruptcy please feel free to contact an experienced New Jersey and Staten Island Bankruptcy Attorney, Karra Kingston or William Bonomo for a free consultation.