Filing Married/Separate in California. Community property confusion!

[Jcniv69]

Hello,
I am married, live in California and need to file bankruptcy. My wife has perfect credit and we don't have any joint credit, therefor, we see no need for her to file with me. We will be buying a house in about 6 years and it's easier to rebuild only one credit file rather than both! Anyway...

My wife has an auto loan that is in her name only that she bought while we were married. Do I need to include it in my bankruptcy petition or can I leave it out as if it doesn't even exist? I ask this because I also have an auto loan that I plan to reaffirm and continue paying the remaining 14 payments. I am worried that the judge won't let us reaffirm 2 auto loans. But I keep reading that community property must be listed regardless of whether or not my name is on her auto loan or not. This doesn't make sense! Then why do I have the option of filing BK Married/Separate??

Finally, should I not even worry about reaffirmation? We CANNOT risk repossession! We need both cars and have no savings to go out and buy a cheap econo, used car or two! Like I said, I owe 14 more payments and my wife about 26 payments. On the means test, there is enough money to pay both auto loans and still have a hundred or so leftover each month.

Please, any help is appreciated.

Regards,
John

[despritfreya]

You really need to discuss this with a qualified attny since your understanding of community property is lacking.

The vehicle that is in your wife's name is your vehicle and MUST be listed on Schedule B. The vehicle loan that is in your wife's name is your loan and MUST be listed on Schedule D. Every credit card used by your wife from the day you got married is your credit card debt and must be listed. Every loan, medical bill and any other obligation (with very few exceptions) incurred by your wife from the day you got married forward is your debt and must be listed. Every trinket (including that non-existent diamond necklace or Picaso painting) she purchased from the day you got married (with very few exceptions) belongs to you and must be listed. All bank accounts just in her name must be listed. I assume you get the picture.

As to reaffirming the vehicle, since you did not sign for your wife's auto a reaffirmation agreement will not be generated by the lender. Your vehicle is another story. If the lender requires it, you will have to enter into the agreement. Such does not mean that a judge will approve it. In my district judges routinely say "no" and so long as the debtor remains current and the vehicle is insured the lender is stuck.

Get an attorney.

Des.

[Jcniv69]

Thanks for the reply. I understand about community property now; just list it all! Haha

However, if I'm listing all of my wife's debt, won't this negatively affect her credit? And if her credit will be negatively affected, isn't it better to just have her file with me then?

With regards to reaffirmation, I keep reading mixed opinions (or experiences) on that. A lot of folks are telling me "DON'T REAFFIRM! That as long as I make my payments and I'm insured, the banks or credit unions won't repossess!" Other people say my vehicles will be repoed even if I make my payments.

[despritfreya]

Here is the problem with your wife not filing. . .

You will obtain a discharge as it relates to your "sole & separate" liability.

You will obtain a discharge as it relates to the liability of the "marital community".

Your wife will not be protected should the marital community end (divorce, death) since she will remain liable based upon her "sole & separate" responsibility.

Further, while community property will be protected by the community discharge, your wife can still be sued. A creditor cannot collect on the judgment if she has no sole & separate property. However, if she obtains any non exempt sole & separate property (inheritance as an example) during the course of the marriage there will be a way to collect.

I rarely advise marital couples not to file jointly. IMO a wish to keep a credit report looking "good" is not a reason not to file due to the ramifications of leaving one spouse potentially exposed.

I cannot comment on how or if her not filing will impact her report as I simply do not know.

As to reaffirming, under 9th Circuit law, there is no "ride-through" for personal property. This is why judges have found ways around the issue. Read this. . .

https://www.courtlistener.com/opinion/1521399/in-re-moustafi/

If the link does not work, Google In re Moustafi, 371 B.R. 434 (Bankr. D. Ariz. 2007). It will give you some insight into the issue.

Des.