Will my filing bankruptcy ruin my spouse’s credit?

Considering bankruptcy in CA – for myself only. Job outsourced. $1800 month in unemployment. $45K in credit card debt (in my name alone); never late on payments. Unemployment will not last forever. Not able to contribute to household bills now. But pay health and life insurance. Always worked and paid bills. I’m 55. No job offers yet. Husband has cancer and is 70+ although he still works but not sure how long this will last. He earns $2K per monthand $1200 in SS. I am beneficiary in his small investments. I have $6K in 401K and $2500 in HSA. We still owe on our mobile home. Will I lose savings, HSA, and home? Husband not party to bankruptcy.

Asked on October 14, 2011 under Bankruptcy Law, California

Answers:

Carl Starrett / Law Offices Of Carl H. Starrett II

Answered 9 years ago | Contributor

If your husband is over 70 and has cancer, his credit score should be the least of your concerns.  If your debts are truly separate, however, it is unlikely that bankruptcy will impact his credit score.  You should both get a copy of your credit report from www.annualcreditreport.com to see if any of your debts are showing up on his credit report.  Any debts showing up on both of your reports must be considered joint debts by the creditor.

Advising a client on what property they get to keep in a bankruptcy is one of the attorney's most important jobs.  ERISA-qualified pension funds like 401K plans are exempt and the debtor can keep them.  However, whether you keep other property such as the mobile home or other investments depends on the value of those assets and what other property you own.  Most of my clients do keep almost everything that they own.

Your best solution is to contact a local bankruptcy who can review your entire situation and give you more precise advice.


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