How does your spouse's credit affect yours after marriage?

[FortLaudy 10]

A little free time for VJing today, woop woop

A British friend from college has been asking me a lot of questions about the AOS process lately, I've been able to help him out with most but there were a few I'm really not clued-up about, I couldn't think of a better place to ask but VJ

My friend would like to pop the question to his USC fiancee, but he is concerned about one aspect. This is how I understand the situation so far: Her credit score is not great and she is under a lot of financial stress as she had to take on a far lesser paying job a year ago as the company she worked for for many years downsized. She can no longer afford the mortgage on the house she owns and is speaking to the bank about a possible short sale or foreclosure. He would like to get married to her but he does not know how her credit history/score will affect His or their combined after the wedding when they possibly want to purchase a house or other asset together. He says this is so far the only thing holding him back from asking her to marry him and he does not know where to find the correct information.

Anybody know more about this or a website with good info I can email to him?

[Ali G. 37]

As long as they have not cosigned or have any joint accounts she defaults on, his credit will not be affected. Your credit does not automatically merge once you get married.

[FortLaudy 10]

Thanks Booyah, that's what I thought too and told him, but I wasn't 100% sure what the law was on this issue. Does this differ from state to state? Here in FL I know that once they get married he can buy a house on his name with his credit but both their names will be on the deed, so that means technically they both own the house together? Can that not then be used as collateral by default incase of whatever debt she has outstanding?

Sorry if I sound confusing, but truly I am confused about this topic as it's been a non-issue for us and I thought someone on VJ might have had the same concern to deal with and I could guide him to a good source of info.

[Ali G. 37]

Thanks Booyah, that's what I thought too and told him, but I wasn't 100% sure what the law was on this issue. Does this differ from state to state? Here in FL I know that once they get married he can buy a house on his name with his credit but both their names will be on the deed, so that means technically they both own the house together? Can that not then be used as collateral by default incase of whatever debt she has outstanding?

Sorry if I sound confusing, but truly I am confused about this topic as it's been a non-issue for us and I thought someone on VJ might have had the same concern to deal with and I could guide him to a good source of info.

The one thing they would need to look into is whether they live in a community state.

I too believe they can purchase a home, yet the loan be under his name. However, if I was him, I would not add her name to the title unless her debt situation is totally clear. Otherwise, yes the house can be dragged into any proceedings, especially if she ends up filing for bankruptcy. Depending on how much other debt she has, it may be best she file for bankruptcy and clear her name from it all. Otherwise the debt may come back and haunt them both.

Edited February 20, 2010 by Booyah

[FortLaudy 10]

The one thing they would need to look into is whether they live in a community state.

I too believe they can purchase a home, yet the loan be under his name. However, if I was him, I would not add her name to the title unless her debt situation is totally clear. Otherwise, yes the house can be dragged into any proceedings, especially if she ends up filing for bankruptcy. Depending on how much other debt she has, it may be best she file for bankruptcy and clear her name from it all. Otherwise the debt may come back and haunt them both.

Yup, this is exactly his concern, that whatever property they decide to buy after marriage will be dragged into proceedings and he will eventually lose out big time in having to pay her debts I guess... I think in FL it's not possible to have a deed/title in one name only if you're married? Anyone know if this is fact?

[Mr. Big Dog 10,747]

If the gal is looking to foreclose or short sell in FL, she'll very likely still be on the hook for the balance. Welcome to the Sunshine state. A co-worker of mine is looking to take a position with the firm overseas and he's thus far unable to get rid of his house even though he has an offer and the mortgage company has agreed to the short sale deal. They are, at this point, still looking to go after him for the balance. Unfortunately, in FL, you're not done when the short sale or foreclosure is complete.

Edited February 21, 2010 by Mr. Big Dog

[NickD 203]

Thought this was an immigration site, when my wife came here, came with a clean slate, her credit was only as good as mine, which is perfect. But since then, has her own credit cards, hey, she is more frugal than I am, so no problems there.

But dealing within the the USA is different, did have a court order stating that with our legal separation, I was no longer responsible for my ex's future debts, that was pure BS, state has yet another statue that held me liable for the debts ex encountered after our legal separation and up to our final divorce. I got hit with another 16 grand of her debts, can't tell you how teed off I was, but had no choice but to pay them.

Feel if I was marrying a gal from the states, in debt, would get some very strong legal advice, or have her clean up those debts first before tying the knot, have to watch out for those hidden statues.

[Gary and Alla 3,694]

Not necessarliy at all. If you combine credit accounts, it affects one the same as the other. If you keep them separate, particularly if the woman keeps her maiden name, it makes no difference at all. You can add your spouse to your home "deed" without adding them to your mortgage loan. Ownership of the property is not the same as ownership of the loan.

One of the best ways to establish credit, individually, is to open a separate Credit Union account. Check which ones are available for your spouse. Alla deposited $50 and was given a $500 credit card. After 6 months it was raised to $1,500 and was just raised to $5,000 after one year , and she rarely uses it and pays the balance right away. Our credit is not combined. This is NOT the same as not combining our finances, property ownership, etc., which have been combined.

[FortLaudy 10]

Not necessarliy at all. If you combine credit accounts, it affects one the same as the other. If you keep them separate, particularly if the woman keeps her maiden name, it makes no difference at all. You can add your spouse to your home "deed" without adding them to your mortgage loan. Ownership of the property is not the same as ownership of the loan.

One of the best ways to establish credit, individually, is to open a separate Credit Union account. Check which ones are available for your spouse. Alla deposited $50 and was given a $500 credit card. After 6 months it was raised to $1,500 and was just raised to $5,000 after one year , and she rarely uses it and pays the balance right away. Our credit is not combined. This is NOT the same as not combining our finances, property ownership, etc., which have been combined.

Thanks Gary , I think my friend is still a little scared of sealing the deal because of this whole issue.. He's now thinking of buying the property first before getting married so he is not forced to have her name on the deed too and by that gambling with the issue of whether the house will be dragged into proceedings incase someone decides to come after her for outstanding debts.

[Old Dominion 26]

Bottom line, of course, is that she cannot escape her debts. They will need to be paid.

[FortLaudy 10]

Bottom line, of course, is that she cannot escape her debts. They will need to be paid.

So even if a house is foreclosed or a house is short sold, the bank will come after one for the outstanding balance, even property your spouse owns? What would she need to do to get out of this, declare bankcruptcy before they getting married so that he doesn't become responsible for her debts?

[Marzy 1]

Short sale doesn't give her any debt as long she paid her monthly mortgages. It's getting rid off of the property that she can't afford anymore unless she didn't pay her previous mortgages then it is a debt trouble. As long she declares short sale to her mortgage bank, she'll be fine. But, her credit score will be less 150 or more. Also, if she has any debt, her future husband is not responsible for it if their marriage fell apart.

Edited February 21, 2010 by Fresgal

[scandal 951]

So even if a house is foreclosed or a house is short sold, the bank will come after one for the outstanding balance, even property your spouse owns? What would she need to do to get out of this, declare bankcruptcy before they getting married so that he doesn't become responsible for her debts?

You don't make the slightest bit of sense to me.

You go on and on in thread after thread posting about how annoyed you are that people don't take personal responsibility, complaining about all the "welfare freeloaders". Yet you think it's perfectly ok that someone buys an asset they know can go down in value, have that asset indeed go down so they are now upside down on their mortgage, and be able to simply walk away and stick it to the mortgage holder with no further obligation on their part? Where's your ethos of personal responsibility in that??

Edited February 21, 2010 by scandal

[Mr. Big Dog 10,747]

Short sale doesn't give her any debt as long she paid her monthly mortgages. It's getting rid off of the property that she can't afford anymore unless she didn't pay her previous mortgages then it is a debt trouble. As long she declares short sale to her mortgage bank, she'll be fine.

Good Luck with that in Florida. It's not how it works. A co-worker of mine looking to relocate overseas is having this issue right now. The bank accepted the short sale but would have him on the hook for the remainder of the mortgage owed. There's that nasty little promissory note, you know...