bankruptcy?

[mrs jam]

This is probably going to be a dumb question, but I''ve never really researched bankruptcy before. Let''s say "someone" is contemplating marriage to a guy who has declared bankruptcy in 2001 (the total bankruptcy- I''m not sure what the chapter number is) and who has just now filed for Chapter 7 bankruptcy (which sounds similar to a debt consolidation program- he''ll still have to repay the debts, but is protected from getting his wages garnished and calls from bill collectors and attorneys.) How will that affect his significant other? I know that his poor credit will make buying a house very difficult. The guy in question is actually a loan officer for a very large national bank, so he "knows better" about how to handle finances, but he''s had a run of very bad luck and poor decision-making. Does anyone have any experience with bankruptcy and how it affects a couple''s life together? Thank you!

 

[neatfreak]

Well, simply because it sounds like he has gotten into trouble TWICE in the past number of years, that is a major red flag for me. Since there is a lot of comingling of debt when a couple marries, I would be very very cautious about marrying someone who had made those mistakes a number of times in the past. I would never want my credit rating to be destroyed by someone else.

I would just be really cautious...to me if someone is THAT irresponsible about money, they might be irresponsible in other ways too.

And FYI: A Ch.7 bankruptcy IS a real bankruptcy, and if I remember correctly, it stays on your credit report for 10 years. To have TWO? Not good.

 

[Cehrabehra]

Date: 6/6/2007 3:10:16 PM
Author:mrs jam
This is probably going to be a dumb question, but I''ve never really researched bankruptcy before. Let''s say ''someone'' is contemplating marriage to a guy who has declared bankruptcy in 2001 (the total bankruptcy- I''m not sure what the chapter number is) and who has just now filed for Chapter 7 bankruptcy (which sounds similar to a debt consolidation program- he''ll still have to repay the debts, but is protected from getting his wages garnished and calls from bill collectors and attorneys.) How will that affect his significant other? I know that his poor credit will make buying a house very difficult. The guy in question is actually a loan officer for a very large national bank, so he ''knows better'' about how to handle finances, but he''s had a run of very bad luck and poor decision-making. Does anyone have any experience with bankruptcy and how it affects a couple''s life together? Thank you!

Is this the only issue? If it is the only issue I *might* overlook it, but there is so much more to marriage than just love, unfortunately. However, if this is the guy with the religion issues I''d run even faster knowing there are money issues as well.

 

[starryeyed]

Mrs Jam, money is one of those things that you MUST see eye-to-eye on. With 2 bankruptcies, I''d run the other way. Marriage, and hence, co-mingling my assets (doubt he even has any!), would be out-of-the-question.

Quite frankly, sounds like he has a big problem - either he lives beyond his means or he has another problem like gambling or drugs. If you can stomach that kind of BS, fine. Sounds like you will have a life full of money trouble. Personally, I''d run.

 

[Mara]

at the risk of stating the obvious... 'a run of bad luck' should not span 7 years. not to mention the whole obviously-didnt-learn-anything-the-first-time if they are going through it again.

quite honsetly it drives me NUTS quite honestly when people use bankruptcy as a way to get out of taking care of their financial responsibilities. there was this huge article on this recently in i think the WSJ about how people are doing this more and more and it is baffling to me. i don't think i would even consider marriage to someone who was considering a 2nd bankruptcy. i am far too practical.

and again at the risk of stating the obvious, with your other post about this person fresh in my mind about the huge religious and cultural differences that are already there, now this guy is irresponsible about cash as well? aren't you a little too close to retirement to be comfortably tying your life to this individual? is the next bankruptcy another mere 7 years away? unfortunately, you can't live on love in retirement.

i hope that you are really thinking about this. as someone who is entirely removed from the situation, i just shake my head when i see your posts because i feel like you really should know better. don't set yourself up for a 2nd divorce because i can see it coming.

sorry but i had to be frank!! you are a good person and your posts are worrying me.

 

[Gypsy]

I think might be a way to declare yourself an 'innocent spouse' ... it was a LONG time ago that I was looking into this as an intern, but it does ring a bell. Your best bet would be some in depth web search to get an idea of what is out there, followed by a call to a)your lawyer, and b) your financial advisor.

 

[diamondseeker2006]

I wouldn''t even make it past the first date. Anyone who''d marry a guy who had declared backruptcy twice in 7 years is ASKING for major trouble!!! This is a character flaw, not poor decision-making.

 

[mrs jam]

Thanks for your replies. I do know better, but for some reason I''m really attached to this person and keep thinking that things are getting better, but they''re actually not. I definitely do not want to ever go through another divorce; I went through that already after I got married too soon to the wrong person right after graduating from college. Mara, I''m no where near retirement age; I''m just finishing my graduate degree in Curriculum and Instruction. I haven''t been out in the work force for all that long, unfortunately! But I am definitely old enough to know better and to make much wiser decisions than I have been making this past year. It''s just a matter of getting my heart to follow what my head already knows; I''m getting there, but it''s been a roller coaster.

Thanks again for all your replies. I''m realizing that I have forgotten what "normal" is in a relationship, and it helps to get the perspective of others.

 

[Beacon]

Date: 6/6/2007 4:52:53 PM
Author: Gypsy
I think might be a way to declare yourself an ''innocent spouse'' ... it was a LONG time ago that I was looking into this as an intern, but it does ring a bell. Your best bet would be some in depth web search to get an idea of what is out there, followed by a call to a)your lawyer, and b) your financial advisor.

I am not sure, but I thought that "innocent spouse" thing had to do with a cosigned IRS tax return where one spouse was fraudulent and the other did not know. Maybe it can be used in BK stuff.

As to the poster''s question: dear poster - run away before the disaster strikes. If he had a BK cause of a terrible accident or sudden illness while uninsured I would call that "bad luck". However my guess here is that he lives above his means, probably divorced once or twice already and likely gambled and lost on a real estate speculation or two.

Some people are attracted to "bad boy" types and that is their business. Sure date him, go out, have fun whatever, just don''t marry him!! If you do, he''ll be your problem for years to come. My friend almost married one of these and what her girlfriend told her still rings in my ears. She told her, "Martha, Dave (her BF) will just make you old." My friend listened and dodged the bullet. She has a beautiful life now sans the bad boy.

It sounds super mean, but if you were my sister this is what I would tell you. It will end in tears.

 

[Tacori E-ring]

Well the good news is your credit score will always be YOURS and his will always be HIS so if you are worried I would just keep things in one of your names. I am pretty sure you do not have to have both of your names on the loan (just the deed at least in NC) if you do buy a house so you can use your credit score alone. I thought bankruptcy erased out all debt (except medical and student loans) but I agree talking to an lawyer would be a good idea. I thought it was 7 years to get it off your credit report but 10 could be right. I am not sure. If it is 7, his time is almost up for the first one.

So I guess to answer your question it would not affect a spouse too much (as long as you are not on any of the same loans) besides having a higher interest rate based on one income instead of two. Not to say there won''t be other affects but I am just addressing the legal.

 

[Beacon]

Tacori, what you are saying is essentially true, but as a practical matter it can cause problems. If she uses only her credit to buy a house, she can use only her income, not his, and therefore they may be limited in what they can buy. Sometimes the lender (and particularly the title company) will make the non applicant spouse (him) quitclaim before close even if they are not on the loan in case any judgements he has might get attached to the house (community property states). Sometimes that spouse (him) kicks up a big fuss about the quitclaim.

Every time they do anything, like refinance, they will go through this.

I would be wary of signing a joint tax return with this guy - let''s face it, he''s not exactly the most trustworthy, since bankruptcy literally is the public admission that you are reneging on your committments. If she does sign a joint return, and he is pulling some tricks she absolutely will be liable to the guys at the IRS. She can file married filing separately but that is a higher rate of taxation. (might be worth it as insurance though).

You can bet that this fellow will ask her to give him some credit cards as an "additional card holder". This will be the beginning of his entry to her credit.

Gosh I sound so cynical here. But it''s sad, I have really seen this stuff happen. Women need to be very strong and protect themselves from people who have the ability and the track record of making problems.

 

[Mara]

hehe Mrs Jam I know that you are not nearing retirement age, beautiful woman!! But I am in my early 30''s and I have been thinking about it a lot lately...and I just know I would not want to be putting myself in that kind of dire financial situation by tying myself to someone like that at my age.

I think it is very important to get a reality check sometimes...when your heart is involved your head sometimes doesn''t speak up...but quite seriously, think long and hard about this. This relationship sounds like it''s got red flags all over the place going up and they are not just sedately flying but they are waving fast and furious.

 

[neatfreak]

Date: 6/6/2007 5:41:25 PM
Author: Tacori E-ring
Well the good news is your credit score will always be YOURS and his will always be HIS so if you are worried I would just keep things in one of your names. I am pretty sure you do not have to have both of your names on the loan (just the deed at least in NC) if you do buy a house so you can use your credit score alone. I thought bankruptcy erased out all debt (except medical and student loans) but I agree talking to an lawyer would be a good idea. I thought it was 7 years to get it off your credit report but 10 could be right. I am not sure. If it is 7, his time is almost up for the first one.


So I guess to answer your question it would not affect a spouse too much (as long as you are not on any of the same loans) besides having a higher interest rate based on one income instead of two. Not to say there won''t be other affects but I am just addressing the legal.

Chapter 7 bankruptcy is 10 years and Ch. 13 is 7 years. The credit scores can get comingled if you EVER apply for loans, CC''s, anything together though, so be careful. Even if you just add his name onto one of your cards, it can be affected.

 

[Cehrabehra]

Date: 6/6/2007 5:56:56 PM
Author: Beacon
Tacori, what you are saying is essentially true, but as a practical matter it can cause problems. If she uses only her credit to buy a house, she can use only her income, not his, and therefore they may be limited in what they can buy. Sometimes the lender (and particularly the title company) will make the non applicant spouse (him) quitclaim before close even if they are not on the loan in case any judgements he has might get attached to the house (community property states). Sometimes that spouse (him) kicks up a big fuss about the quitclaim.

Every time they do anything, like refinance, they will go through this.

I would be wary of signing a joint tax return with this guy - let''s face it, he''s not exactly the most trustworthy, since bankruptcy literally is the public admission that you are reneging on your committments. If she does sign a joint return, and he is pulling some tricks she absolutely will be liable to the guys at the IRS. She can file married filing separately but that is a higher rate of taxation. (might be worth it as insurance though).

You can bet that this fellow will ask her to give him some credit cards as an ''additional card holder''. This will be the beginning of his entry to her credit.

Gosh I sound so cynical here. But it''s sad, I have really seen this stuff happen. Women need to be very strong and protect themselves from people who have the ability and the track record of making problems.

not to mention him leeching off of her.... "oh honey, can I put this on your card?" yikes!!!!

 

[Tacori E-ring]

Well, I just got the feeling she was asking about bankruptcy situations *not* relationship advice. I am sure Mrs. Jam knows what is the right situation for her.

neatfreak, I knew something was 7 years but I am far from an expert on these things. I just know that my DH gets loans in his name only all the time for his business and it is never a problem (except I have to go to the closings which is a PITA) so even though like I said before the interest rate may be higher, it would not be as high as a spouse with bad credit on the loan. Our situation is obviously different. I don''t have bad credit but it is better for him to get them in his name.

Beacon, I never thought of taxes. That is a good point for her.

 

[Independent Gal]

Mrs. Jam, if your head knows this isn''t normal and that misery will follow, then please, please, please let your head rule your heart! I know from experience what a struggle that can be. But if your MIND knows you don''t ''really'' want this and that it will only hurt you in the end, then you''ve really got to leave him! One thing that can help is to think of being with him like alcoholics sometimes are taught to think about booze. If you''re tempted to spend time with him, think about how it all plays out, right to the bitter end of the horrible divorce, financial ruin, misery, loneliness... Ask yourself ''is calling him now worth that possible ending?''

I''m worried about you, Mrs. Jam. If you know yourself that this situation with him isn''t ''normal'', you''ve GOT to listen to yourself!

Good luck!

 

[Finding_Neverland]

Sounds like the guy filed Chapter 7 bankruptcy the first time and is now in a Chapter 13 repayment Plan. In Chapter 13, the Debtor/Filer repays anywhere from a portion to 100% of their debts.

Bankruptcy Reform of 2005 extended out the time between repeat filings from 6 years under Old Law to 8 years currently. With the time between filings and the repayment plan thing going on, sounds like the guy is doing a Chapter 13 currently.

If the guy had had some sort of life altering occurance that caused him to file,........... Job loss coupled with extended period of unemployment, death of a spouse, some sort of medical issue,........... That would be one thing. Bad things do happen,........ Things beyond anyone''s control,........ To good people.

But this guy filed a Chapter 7. Erased the slate. Started over fresh. And here he is, 6 years later, back in the same boat.

The partner could keep finances separate as others have pointed out. No joint bank accounts. No joint Credit Card accounts. And such.

Beyond the potential Credit woes,.......... There''s a day in day out down side to this guy''s life the partner is gonna have to live with for the next 5 years. Every penny of disposable income the guy has will be paid to the Trustee of the Bankruptcy Court for the benefit of his Creditors.

This guy is not gonna have money for any frills. It will tough, if not impossible, for him to stash back a bit extra as a CYA for emergencies.

So that''s an important consideration as well.

 

[Gypsy]

Date: 6/6/2007 5:38:52 PM
Author: Beacon

Date: 6/6/2007 4:52:53 PM
Author: Gypsy
I think might be a way to declare yourself an ''innocent spouse'' ... it was a LONG time ago that I was looking into this as an intern, but it does ring a bell. Your best bet would be some in depth web search to get an idea of what is out there, followed by a call to a)your lawyer, and b) your financial advisor.

I am not sure, but I thought that ''innocent spouse'' thing had to do with a cosigned IRS tax return where one spouse was fraudulent and the other did not know. Maybe it can be used in BK stuff.

As to the poster''s question: dear poster - run away before the disaster strikes. If he had a BK cause of a terrible accident or sudden illness while uninsured I would call that ''bad luck''. However my guess here is that he lives above his means, probably divorced once or twice already and likely gambled and lost on a real estate speculation or two.

Some people are attracted to ''bad boy'' types and that is their business. Sure date him, go out, have fun whatever, just don''t marry him!! If you do, he''ll be your problem for years to come. My friend almost married one of these and what her girlfriend told her still rings in my ears. She told her, ''Martha, Dave (her BF) will just make you old.'' My friend listened and dodged the bullet. She has a beautiful life now sans the bad boy.

It sounds super mean, but if you were my sister this is what I would tell you. It will end in tears.

Beacon, I think the context I remember it in was something (again this was years ago) about when you get married you should find out about any debts the person has, as you might assume them on marriage so make sure to file an innocent spouse form before getting married.

I was more concerned that if he marries her they might try to get to her money and wages. But I am pretty much ignorant on this whole thing though, not my area of expertise at all. And I *think* I may have been researching it with respect to certain types of loans. Not sure, at all. Still, it''s worth researching for someone.


And Ms Jam... I agree that this will end in tears. And I know that when a man is offering you everything -- except for this ONE flaw of his -- it''s hard to walk away.

But it''s not the number of flaws... it''s the gravity of them. And this is grave.

As hard as it is to walk away now...it will be so much harder to walk away later, when you are older, when you are bound to him deeper and deeper day by day. When you have more good memories to remember, and more excuse to make for him.

This will end in tears either way. It''s up to you how many you cry and for how long.

 

[monarch64]

Mrs. Jam, or friend of Mrs. Jam: you''ve received lots of great advice here. I can only add my favorite quote-- "to thine own self be true." And remember, you are worth being loved by someone worthy of you...take care of yourself.

 

[Kaleigh]

mrs jam,
Gosh I hope you listen to all the very wise advice you have been given here. Sounds like you really need to make a clean break, heart or not. Last thing you want is to go down a path of misery, deception and dissapointment. You''ve been down a rough road before, time to take a detour and make sure that doesn''t happen again!! Please, it''s only going to cause you more pain. And who needs that!!! Be STRONG woman!!!

Hubby is in the financial business, and all I can say is RED FLAGS x 10!!!!

 

[Phoenix]

RUN!! THE OTHER WAY!! As fast as you can!!

 

[asscherisme]

Hi,
Staying out of the relationship red flags and just trying to stay on target to your question, I would NOT marry this man. I'll tell you why.

The fact he is a loan officer and should know better showst that its not a matter of educating him to do better. He knows what he should do but still does not do it. And the fact that he has done this TWICE in 6 years is a super strong indicator he will do it again. If you marry this man, you will be responsible for 1/2 his debt aquired after marriage. Even if its not in your name. So if he has secret credit card or other debt that he gets after you marry, even if you divorce you will have 1/2 to have to pay.

I would also worry about his judgement in other areas.

If you love him and want to be with him. Fine, but if it were me, NO way would I marry him. I would even be hesitant to move in with him because of common law marriage laws. I would research common law marriages and your liability there if you do choose to live with him. And I would under NO circumstances co-sign any sort of loan for him or co-buy a home together. If you do move it, you could put a home under your name and he pay you to help with the mortgage. But I would not take on a higher mortgage that you can afford on your own in case he can't pay his share.

I don't mean to be harsh but based on his history I would be really really careful to protect yourself.

edited to add, if it were me, I would cut loose because I don't feel I could be a partner with someone who I could not fully trust. To me money and being responsible with it is about security and I feel the need to be secure in a relationship and want someone who values and respects that.

 

[DivaDiamond007]

I know a bit about bankruptcy - a Chapter 7 is a "true" bankruptcy where you can get rid of your debt and a Chapter 13 is a bill repayment plan. They both can be reported for up to 10 years on your credit reports. A bankruptcy won''t necessarily affect your spouse so long as you don''t have any joint credit and you are NOT responsible for your spouses debt if you divorce - unless it is joint debt. I''ve never heard of anything about an "innocent spouse" - maybe its not a US thing...? Anyways - I had a good friend file bankruptcy due to a horrific auto accident (drunk driver) combined with no insurance and I helped her out during the process (I work as a paralegal and my boss representd her).

I would proceed with caution with this guy. One time, okay - but two times (

) is a bit overboard if you ask me. You don''t want to get all wrapped up with this guy and have him take off with your money and assets. He should know better if he works in the banking industry. However, it all comes down to what you are most comfortable with. Keep everybody posted. Best of luck!

 

[mrs jam]

Thank you all for your very sound advice. This is the first serious relationship, actually the only relationship, I''ve had since my divorce. I just latched on hard, and I''m not really sure why. He''s a good guy, but he has a lot of baggage, as do I, and we''re just not a good combination. It''s just hard to end things, but everyone in my life is telling me to GET OUT. I definitely do not want to make another mistake and am just going to take a break from relationships in general. It''s just hard right now, but I''m being a big old baby! Thanks for your replies.

 

[neatfreak]

Date: 6/7/2007 3:20:15 PM
Author: mrs jam
Thank you all for your very sound advice. This is the first serious relationship, actually the only relationship, I''ve had since my divorce. I just latched on hard, and I''m not really sure why. He''s a good guy, but he has a lot of baggage, as do I, and we''re just not a good combination. It''s just hard to end things, but everyone in my life is telling me to GET OUT. I definitely do not want to make another mistake and am just going to take a break from relationships in general. It''s just hard right now, but I''m being a big old baby! Thanks for your replies.

Yup, unfortunately you are. But getting out is the BEST thing you can do for yourself. Best of luck!!!!