Will a Spouse's Bad Credit Hurt My Score?

You indicated you reside in Florida. See the Bills.com article Florida Collection Laws to get a basic overview of your rights and liabilities as a Florida resident.

Generally, in common law states like Florida, spouses do not have liability for each other's separate debts. However, it would be wise for your fiancé to send a quick e-mail to his lawyer to ask if his soon-to-be-spouse will assume liability for his chapter 13 payments while he's alive.

Have him ask the same question about spousal liability should he die. In some states, the state law is explicit in that the surviving spouse has no liability. Other states leave the question unanswered, or to be answered by their state's probate courts. I do not know how Florida handles this question.

I do not see how a chapter 7 or 13 you file in September, before your November marriage, can have an impact on what I surmise is either an FHA construction loan, or an FHA 203K loan. Typically, FHA construction loans close before construction begins. If the loan closes before the November marriage then I cannot foresee circumstances where the lender would have a reason to ask about, or be given notice of your bankruptcy.

If the loan closes after the wedding and you live in a community property state, then the lender may express a concern about your bankruptcy, even though you are not a borrower. However, that should not scuttle the loan if, as you mentioned, you are not the borrower, but the borrower's spouse.

I suggest that your fiance ask a direct question to his loan officer, so he hears straight from his lender whether or not there is a potential problem with your filing for BK.

Please see the Bills.com resource How to Remove a Name From a Joint Mortgage, which discusses the issue you raised in your message.

Each person's credit score is based on accounts that are managed in their own name. Your past activities will not affect your fiance, as long as she was not a responsible party to those accounts. You should work on improving your credit. If you feel that a creditor will sue you, then avoid having joint bank accounts.

Marriage does not create a "joint credit score." Nor does Spouse A's poor credit history sully Spouse B's pristine credit history or score when they walk down the aisle. Spouse A can have terrible credit for the duration of a marriage while Spouse B's credit score remains high in the clouds.

Focus on paying your new delinquent accounts first — they are likely causing the most damage. Then focus on getting your delinquent student loan rehabilitated.

It looks like you got the answers you were seeking regarding the effect of your credit on your fiance's credit, so I will tell you what I know about getting that default off of your record. You may already know this, but just in case you don't (!) here goes:

You can probably "rehabilitate" your student loan, which will remove the delinquency from your credit report. I did this. I called my loan servicing company (Great Lakes, Direct Loans . ..), and I told them that I wished to rehab my defaulted student loan. They put me on an affordable payment plan (in my case, $60/month). Once I make that payment, on time, for 9 months in a row, they will reinstate my student loan, putting me back on a typical repayment plan, and the defaulted student loan will be completely removed from my credit report, as if it never happened. And if, by some horrible strike of luck, you are late on a payment, they will STILL work with you!

Unfortunately, making these monthly payments on time for 9 months will not help me to build positive credit on my report, nor will it do anything to make the student loan default look any better before the end of the 9 month period, because this rehab repayment program does NOT show up on my credit report. I will have to wait the 9 months before there will be any effect on my credit record. I wanted to get a car loan, or perhaps a lease on a new apartment, and this student loan default were keeping me from qualifying, I might make use of the following information:

I have a contract/agreement in my possession that which documents my enrollment in the rehabilitation program, and many of the details, such as my monthly payment amount and the date in which my default will be (presumably) removed from my credit record. I would imagine that I could get a letter, if requested, from my student loan servicing company, which stated that thus far, all of my payments have been on time. Another alternative would be to print out my bank statement, showing that I have been making each payment on time. I could also add this information in the comments section on my credit report. This information might be enough to convince a creditor to overlook the default. No guarantees.

I set up auto-pay with my bank, so that my rehab payment would never be late, b/c I, too, was guilty of getting busy and forgetting about it. (I had cancer and was dealing with surgery and chemo, etc, and forgot that my deferment was coming to an end . . . then . . .DEFAULT! OUCH!)

After you have made your final (9th) payment, your student loan will be reinstated and it will go back to a normal status. This means that you will get a new repayment plan. If you are worried about being able to make your payments, there are always deferments and forbearances which can be requested. However, I would recommend the fairly new income based repayment plan. Your monthly payment can actually be as low as $ZERO if your income is low enough. The advantage to this is that you will not "use up" your limited number of forbearances and deferments.

The disadvantage is, of course, that you will still be paying interest, and the government will not pay the interest on the subsidized portion of your loans if you have any.

I was pleasantly surprised at how willing they were to help me to get back on track.