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Established Member
mf91745
Posts: 30
Registered: ‎09-13-2011

Will My Bankruptcy Affect My Spouse's Credit? (Moving Out of Community Property State)

I may have to do a bankruptcy to get out from under a $48,000 credit card debt. The debt is on 3 cards, all in my name, but on one of them my spouse is an authorized user. If I do the BK, will it affect my spouse's credit score? One possible wrinkle: we're in CA now, a community property state, but the BK won't happen until we move to OR in a few months, which AFAIK is not a community property state.


Thanks to anyone who could venture an answer.

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llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Will My Bankruptcy Affect My Spouse's Credit? (Moving Out of Community Property State)

I know very little about BKs, other than extreme steps should be taken to avoid it, but this isn't the thread for that. I guess I'd first start by removing her as the AU on that CC before filing. So as long as any credit items are not linked to her that are to be included in the BK (e.g. car, home, joint accounts, etc.), then her score should be fine because the "IIB" wouldn't be included anywhere on her credit reports.

Established Member
mf91745
Posts: 30
Registered: ‎09-13-2011

Re: Will My Bankruptcy Affect My Spouse's Credit? (Moving Out of Community Property State)


llecs wrote:

... this isn't the thread for [BK]. I guess I'd first start by removing her as the AU on that CC before filing. So as long as any credit items are not linked to her ... her score should be fine because the "IIB" wouldn't be included anywhere on her credit reports.


Thanks for the response. I'm using this forum to ask about how FICO scoring works with respect to a BK -- I would not ask about any other aspects of BK here -- so I hope I'm in an appropriate forum. I'm only interested in the scoring algorithm, to the extent that people understand it.

 

What is "IIB"?

 

Based on what I've read on the Internet so far, it appears that FICO scoring of a spouse can be affected by negative items on a spouse in community property states.


Thanks again to all for any comments.

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Will My Bankruptcy Affect My Spouse's Credit? (Moving Out of Community Property State)

You are posting in the right spot with regards to FICO scoring.

 

IIB = included in Bankruptcy.

 


mf91745 wrote:

Based on what I've read on the Internet so far, it appears that FICO scoring of a spouse can be affected by negative items on a spouse in community property states.



I disagree with the above statements. FICO scores what is on your credit reports. Your credit reports don't care if you live in a community property state. Regardless of where you live, if the TL is listed as IIB, there would be a negative impact on whosever report it reports on.

 

BTW, these might help:

 

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

Established Member
mf91745
Posts: 30
Registered: ‎09-13-2011

Re: Will My Bankruptcy Affect My Spouse's Credit? (Moving Out of Community Property State)



I disagree with the above statements. FICO scores what is on your credit reports. Your credit reports don't care if you live in a community property state. Regardless of where you live, if the TL is listed as IIB, there would be a negative impact on whosever report it reports on.

 

BTW, these might help: Common Abbreviations

 



Thanks. It's good to hear a different opinion. And thanks for the abbreviations - I didn't see it.

 

I wonder if in community property states there is some roundabout -- but legal -- mechanism by which creditors can insert notations into a spouse's credit history? I'll continue to investigate....

Senior Contributor
Booner72
Posts: 3,889
Registered: ‎05-24-2011

Re: Will My Bankruptcy Affect My Spouse's Credit? (Moving Out of Community Property State)


mf91745 wrote:

I may have to do a bankruptcy to get out from under a $48,000 credit card debt. The debt is on 3 cards, all in my name, but on one of them my spouse is an authorized user. If I do the BK, will it affect my spouse's credit score? One possible wrinkle: we're in CA now, a community property state, but the BK won't happen until we move to OR in a few months, which AFAIK is not a community property state.


Thanks to anyone who could venture an answer.


Oregon is definitely NOT a community property state.

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ptr2593
Posts: 1,486
Registered: ‎08-14-2011

Re: Will My Bankruptcy Affect My Spouse's Credit? (Moving Out of Community Property State)

As llecs said, as long as your spouse's name isn't on any of the accounts associated with the BK it should not affect her.  It will affect your spouse if you decide to apply for loans together in the future.

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Moderator Emeritus
beamMEup
Posts: 4,473
Registered: ‎12-31-2008

Re: Will My Bankruptcy Affect My Spouse's Credit? (Moving Out of Community Property State)


ptr2593 wrote:

As llecs said, as long as your spouse's name isn't on any of the accounts associated with the BK it should not affect her.  It will affect your spouse if you decide to apply for loans together in the future.



Just to clarify - it will affect your spouse only in that the loans you apply for together in the future will look at both credit reports and may (or may not) deny or give different terms based on one or the other credit report.  It will not affect your credit report if you decide to app for loans together in the future.  I know that's what you were saying, just thought I'd toss that in.  :smileywink:

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