Legal Question in Bankruptcy in New Jersey
Bankruptcy Concerns and Separation
My daughter's husband is considering filing for Bankruptcy. They each hold separate checking and savings accounts in their own names. They also have credit cards in their own names. The only joint accounts they have are a few creidt cards with both names on them. He has suggested that she get herself removed from the joint credit card accounts before he decides to declare bankruptcy. These are my concerns:
1. All debt incurred was during the marriage. If she doesn't file and he does then she is still responsible for those joint debts. Will taking her name off the joint accounts before he files for Bankrupty relieve her of the responsibility of payment for those debts?
2. She has excellent credit. Will this affect her credit rating and her credit report?
Let me add that this is a troubled marriage and she is contemplating separation. I'm just concerned that if she decides to separate and go her own way, that she's able to do so without additional debt and with her credit status as good as it is now.
1 Answer from Attorneys
Re: Bankruptcy Concerns and Separation
Unfortunately, marital debt will remain marital debt unless the divorce judgment says she's not responsible. So, the bankruptcy won't shield her from this problem automatically. Also, removing name from joint account won't necessarily get her off the hook, again, the divorce judgment may settle that problem. Also, the credit bureaus are always getting info. incorrect when one spouse declares bankruptcy. So, to the extent that the reporting agencies will make mistakes on her report showing her as bankrupt as well, yes, his bankruptcy will affect her credit to the extent of those mistakes.
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