Marriage as a Reckoning

Like many people who start small businesses, Amy Lee had financed her start-up with her personal credit cards. When cash flow got tight, she simply accepted another of the pre-approved offers that filled her mailbox on an almost daily basis.

By the time she was able to sell her company to a local competitor, Amy found herself with $40,000 in credit card debt remaining.

She was planning to be married in about a month. The invitations had been sent, and everything was progressing according to schedule.

But Amy’s fiance was not pleased about inheriting what he perceived as a lot of debt. The couple lived in a community property state, so he insisted that she declare bankruptcy before their wedding day.

Was this a wise move? The bankruptcy definitely affected Amy’s credit rating in a dramatic way. And it would stay on her credit report for 10 years. But her husband’s credit was so good that the couple was able to purchase two new vehicles based on his credit score alone.

After about four years of rebuilding her credit, Amy’s scores also had risen enough for the couple to qualify together for a mortgage at a very good interest rate, and they were able to buy their first home.

Next: Secrets are Not a Good Sign