Post-Bankruptcy Survival: Stay-At-Home Spouses Could Be Denied Credit
The Federal Reserve is coming under fire after it proposed that credit card companies consider individual income and not household income when deciding whether they will issue a credit card. Many protested saying that married women (and some men) who don’t work outside the home would be unfairly penalized by the law. The Fed responded by saying that the nonworking spouse could get a credit card if the working spouse co-signed. This can be especially damaging for married post-bankruptcy debtors who don’t earn an income in a job outside of their home. After bankruptcy, all debtors need to rebuild their credit, and that includes work-at-home spouses.
While it is understandable that the Federal Reserve wants to make sure that credit cards are only being issued to individuals who have an income and can repay the debt. The Federal Reserve has failed to understand that the income of a working spouse is also the income of a non-working spouse. Unfortunately, the Federal Reserve has not shown any signs of changing its position. So what should a stay-at-home spouse do after they exit bankruptcy? Let’s take a look at a few strategies:
- The post-bankruptcy debtor who does not work outside of the home could apply for a secured credit card in their name and then slowly earn the right to have it converted to an unsecured credit card.
- The stay-at-home spouse could ask for their spouse to co-sign their unsecured credit card after they exit bankruptcy.
- The stay-at-home spouse may want to consider starting an at-home business or even receiving an “official” salary from their spouse as a way of securing their own line of credit after bankruptcy.
(source: http://www.businessweek.com/magazine/content/11_10/b4218030561940.htm)

















