Expert: Terry Leeders - 2/22/2008

Question
My husband's wages are being garnished for a defaulted loan from 1999(before we were married). The original loan was $10,000, but the garnishment total will be 17K. $9K has already been garnished.  There is another judgment against for $7K from another company.  
We would like to buy a home in the next couple of years; if he declares bankruptcy will this be possible. Also, we have individual bank accounts and one joint account. If we have a joint account how will his bankruptcy affect me?

Answer
These types of debts are dischargeable in a bankruptcy case. Once the case is filed, the garnishment will stop.  Post bankruptcy, my clients are having no problems re-establishing credit.  They are getting home loans. Obviously, the real estate mortgage market is down, so you may have to shop around a bit to get good rates, put a larger down payment etc, but the lenders are out there to help.

Depending on the state, most bank accounts that are only yours wouldn't be effected, assuming he is not putting his money into your account.  Speak to your local bankruptcy attorney to assist you in protecting your assets.