My fiance came out of a divorce with $21,000 in CC debt he did not run up. After asking and reading ALOT on this board, we have decided to just go ahead and let him file Bancruptcy. Here are my reasons why I think we will be fine. Please let me know if we are making the wrong desicion. 1) I have great credit and ZERO debt. Plus, living with my parents for the last two years I have put away alot of money, just plain cash sitting in a money market account, not including my 401K. I would pre-qualify for a home without him. I'll purchase b4 we get married next summer and add him to the title only. (I was planning to buy a home by myself before I met him). 2) I want this all over by the time we get married next October. If we go through the hoops you all have, validation letters etc, it could take a while, they could provide the requested material, meaning we have to pay it anyway and we'll be married therefore if he still needed to file Bancruptcy it would now affect my credit. We are NOT paying that money, especially since it wasn't his. He wasn't even allowed to have a credit card by his ex-wife. 3) He can file while he's still single, I can add him as a AU to my credit cards afterwards so he can rebuild off my credit pretty quickly. I just can't think of any reason why his bancruptcy could have a negative impact on "us". We are getting him a new car this weekend, by the time he needs a new one, he'll be four years into BK and rebuilt his credit by then. What am I missing? Am I wrong in assuming most people come out of debt and start at zero? We aren't at zero. I don't believe in CC's, so I'd never drive up mine affecting my debt to income ratio. I just can't see how his BK could affect us, if we have a home, cars, car insurance, plenty of cash, I have 5 credit cards all with zero balances. What am I forgetting? I know $21,000 isn't all that much, but it's not his debt and I can't fathom spending that kind of money when it could be spent on our wedding.
I envy your fiance, looks like he really has caught a keeper that will look out for his best interest. Good luck to you guys! P.S. - Even though I cringe at the thought of BK I think you have a good plan layed out.
If his new car is paid for in cash, make sure he's not the registered owner If paid by car loan, make sure the loan stays "upside down" - that is you owe more than it's worth - during the BK proceedings
Why would you BK when most of these old debts would fall off sooner that the BK would? If the debts are being reaged then fight back, demand the corrections and sue if they aren't made. You could even come away from the process with them paying you. Unless he is buried by hundreds of thousands of dollars in debt and are trying to preserve assets such as a house, I can't see any reasons for filing a bankruptcy, especially because it will remain on his credit history for 10 years. Is that what you want? Fighting back will require a lot of work, but when everything is said and done will be gone in a shorter period of time and his credit history will be in better shape. Haven't you seen the lines on credit application asking about have you EVER file BK? Everything you wrote is logical and one some level makes sense, but try not to think about just the next year or two, think about your situation in terms of your 5 and 10 year plan as well. Just about everything you will want to do financially together in the future years of your marriage will be effected by a bankruptcy. You should focus on a solution that will have you BOTH be financial equals in the shortest amount of time, and that will be one of the foundations for a good, long-term marriage. If you start your marriage on an unequal footing it could cause resentments that could resurface throughout the life of your marriage, and I speak from experience, 15 years of it. I have been in his position and I made it through just fine without BK. Don't take the easy way out - you will pay for it in the future. Good luck.
What's the statute of limitations for your state? If the creditors in question can't legally sue you (entirely possible with debts five years old), then you gain nothing by filing bankruptcy. You're attempting to use a long-term solution to what may be a short-term problem.
I should add why I think this is the case. I'm in California, where the SOL is four years max. Most of my debts are five to seven years old as well (though much smaller, except for my student loans, which aren't dischargeable in bankruptcy). So, in my case, I have to wait 2-1/2 years for the bad juju to go away. If I filed bankruptcy, it'd be 10 years. In terms of my 3-, 5-, 7-, and 10-year plan, not filing bankruptcy is the better choice. We all come with baggage. I understand that you don't want him to come with financial baggage, but the only way to ensure that is to marry someone on their 18th birthday. It seems more that this is an emotional need for you to see that your fiance has cut his ties with his ex -- rather than what's practical or pragmatic for your future. Just a thought.
His credit isn't going to affect you just because you get married. If your name isn't on the account, it's not on your credit. I agree with the others. You're probably out of or close to out of the Statute of Limitations. Then they can't sue and get anything. You can make them go away, you can get it off his credit report much easier than a bankruptcy. My husband declared bankruptcy when he got divorced. Nine years later, he still had trouble getting a credit card. Now, his record is pretty clean. But he gets offered $2,500 cards while I get $25,000 cards. I went through hell but not bankruptcy, paid off most of $77K in debt and climbed back up. My problems were more recent than his, but my credit came back stronger and faster.
One more thing: You don't mention what state you're in and whether or not it's a community property state. California, for example, throws some interesting wrenches in the process. What you don't want to do is file for bankruptcy in a community property state or have the bankruptcy discharged after the wedding. So, with that, it really does depend. If the debts are still within statute of limitations and the credit cards were joint and he files bankruptcy, that could prove interesting for the ex.
Stangmobil. Please don't take this the wrong way, but after what you said in another thread, I find your plan to be grossly offensive, and hypocritical. Re: Re: financial responsibility Take your own advice, since you decided to give it so undiscriminately. But don't judge others, unless you are prepared to hear the judgemental advice you gave them to come back on you.
Snakeman, I was pointing out the hypocracy in Stangmobil telling another poster that they should dump their fiance, because of a medical bill which they may or may not be partially responsible for, at the same time that she is trying to think of a quick and easy plan to get her fiance out of over $21,000.00 of marital debt incurred in his previous marriage. (I highly doubt that jdh326's fiance's medical bill was anywhere near $21,000 *AFTER* the co-pay, and the insurance company's payment.) If Stangmobil thinks that all a relationship is about is $, and if jdh326's fiance doesn't pay a medical bill, which may be in error, jdh326 should dump her, why is she at the same time trying to come up with an easy way to quickly get rid of her fiance's debt, because going the correct way will take too long. (Despite the fact that going the BK route will haunt his credit file for 10 years, and make trying to incurr any marital debt in *THEIR* marriage a whole lot harder.
