Dear Paula:

My boyfriend is mad at me for filing bankruptcy. Three years ago I took over my mom’s house, but she didn’t have any money to fix the house. The roof leaked and all the floors were warped and mold was growing all over so I took out some loans to fix it. Well, then I came down with several medical issues including cancer. My boyfriend was told by a financial planner that I would ruin his credit if we get married. I think he’s wrong. Please let me know how this will affect his and my future. Thank you so much for your time and consideration in this matter. – Victoria P.

Dear Victoria:

First, congratulations on making the hard decision to declare bankruptcy and give yourself a fresh start. It sounds like you were trying to do the right thing and wound up in a very tight spot financially. Choosing bankruptcy was something I’m sure you didn’t do lightly. But it sounds like you made a choice that would give you the emotional resources to battle back from cancer and other medical challenges. I know that bankruptcy was a hard decision to make. And having emotional issues added of whether or not your bankruptcy will affect your boyfriend’s credit if you get married also isn’t easy. Looking at it through his eyes, though, you can probably see the fear that’s behind his concern.

Your bankruptcy will not affect his credit report or his credit score, directly. What it may do is make it a little more challenging for the two of you to qualify together for financing when you’re ready to buy a home, for example. You may only be able to qualify based on his salary. This is actually a blessing in disguise. You see, too many people build their financial lives around what credit they can get “together.” Should circumstances change, and one of you wind up unemployed for some reason, then those credit obligations that were based on your two-income household suddenly become great big burdens. And money issues are one of the big bad boy issues that tank most marriages.

I encourage you to look at this as an incredible blessing for the two of you as you start out your lives together. If all of your financial decisions are made as if you only have your fiance’s income, something wonderful happens. Any income you’re making can be used to both build your savings and investments. You can pay cash for everyday items and future items AND can use your income to accelerate the payoff of any mortgage or car loan you take on. You both have a unique opportunity to do what folks used to do in the “old days” which is create true financial security built around only buying what you can truly afford to pay for today. My dear friend Pete Dickinson (author of The Retirement Letter newsletter and Sunbelt Retirement and scores of other great books) and his wife Brigie built all their wealth this way. Brigie was a librarian and Pete was a writer and editor (often freelance during the early years together). They lived off her salary and banked all the money he made. They used the banked money to build their savings and investments and purchase items that otherwise would have been financed, including their investment real estate. They retired early to their little slice of paradise and still live happily ever after. I look forward to hearing that you and your intended have done the same!

Paula Langguth Ryan