For richer, for poorer
Question
I'm planning to get married in the summer. My fiancé declared himself bankrupt last year, and he will not be freed from it until April 2006. After we're married will I be able to get a mortgage in my name only, or will his bankruptcy affect us both?
Also what effect if any will his bankruptcy have on my financial position once we are married?
Answer
Congratulations on your engagement!
This area is quite complex and there are quite a few ifs and buts to the answer.
The bankruptcy laws changed in April 2004. This legislation not only affects bankruptcies after this date but will also affect those made before 1st April 2004. This may mean your fiancé will be automatically discharged from his bankruptcy on 1st April 2005 and not April 2006. This will not be the case if:
- During the previous 15 years, from the date of the current bankruptcy order her applied for bankruptcy before, or
- The Official Receiver has suspended his discharge for non-cooperation.
Any Income Payment Order that is in place will continue to run its term despite an early discharge. It is imperative any remaining payments continue after the discharge or the Official Receiver has the power to bankrupt a person again for non-compliance.
You've asked about how this will affect your status when you apply for a mortgage. It's important you both check the credit registers that financial institutions use when considering lending credit. The agencies who hold these registers are Experian, Equifax and Callcredit and you can obtain a copy of your file by filling in their forms and forwarding the fee of £2 by post or alternatively by applying online using a debit or credit card. This will show whether you are linked financially and whether there is likely to be a problem when applying for credit.
You can improve your credit file by filing notices of disassociations and corrections. A notice of correction is particularly useful for your fiancé if the bankruptcy came about because of unfortunate circumstances e.g. after redundancy, ill health, relationship split etc. Although the notice of correction does not change the facts it does give creditors an insight as to why he encountered difficulties.
Under the Data Protection Act 1998 a credit company cannot assume a financial connection on the basis of a shared surname where there has been a shared current or previous address, without proof. You can ask to be assessed as an individual, even if there is proof a financial connection. The credit reference agencies are amending their data but this may not be complete before end of 2004.
Even if you do this you may still encounter difficulties but you should remember there are numerous financial institutions on the high street so you can shop around when you're buying your own home.
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