Anyone already married or soon to be married will face financial implications of merging their lives together, not all of which are bad. Having jointly held debt can be both beneficial and challenging. Here is what you need to know:
The Good
Jointly held debts can be easier to come by when one member has a lesser credit score. Lenders can be more willing to extend credit to a couple versus an individual when one of the members carries a higher credit score. Remember that applying for a jointly held debt together doesn’t mean your credit scores are merging, just that the debt liability will be attributed to both parties. If you are looking to buy a car or purchase a home, jointly held debts are often required to involve both parties in order to secure the loan.
The Bad
A jointly held debt spreads the liability for the debt two both parties. Filing for bankruptcy could leave the other spouse solely liable for the debt if the bankruptcy is not filed together. This means that should you default on the debt, or the marriage terminate for any reason, the creditor could seek out either party for full payment. This further complicates asset protection when liquidation or repossession becomes imminent.
The overall message is that any debt, jointly held or individual, should be managed carefully. While financial hardship is rarely predicted, consulting with an experienced St. Petersburg bankruptcy attorney can help ensure your delinquent debts are resolved in a way to protect both parties.