Marrying and Collections

[down @ out]

Hello Everyone,

I live in a community property state and will be marrying someone in May who has a lot of credit problems.

She was taken advantage of in a previous relationship.

Anyway I have a home. I understand that I am not responsible for her debts but I am concerned that in terms of the house since I will be paying on in after we are married will her creditors be able to file a lien against the property since technically it will be paid for out of community funds?

She does not have a job at the moment.

Also she may file a bankruptcy later.

Thoughts?

Thanks

[AngelinaCatHub]

The holdings and resources owned in common by a Husband and Wife.

Community Property Law concerns the distribution of property acquired by a couple during marriage in the event of the end of the marriage, whether by Divorce or death of one of the parties. In community property states all property accumulated by a husband and wife during their marriage becomes joint property even if it was originally acquired in the name of only one partner. The states that utilize a community property method of dividing resources were influenced by the Civil Law system of France, Spain, and Mexico.

Laws vary among the states that recognize community property; however, the basic idea is that a husband and wife each acquire a one-half interest in what is labeled community property. A determining factor in the classification of a particular asset as community property is the time of acquisition. Community property is ordinarily defined as everything the couple owns that is acquired during the marriage with the exception of separate property owned by either of them individually. Separate property is that property that each individual brings into the marriage, in addition to anything that either spouse acquires by inheritance during the marriage.

Generally, four types of property acquired after marriage amount to community property: earnings, damages obtained from a personal injury suit, damages awarded in an industrial accident action, and rents and profits from separate property.

http://legal-dictionary.thefreedictionary.com/Community+Property

I think this will help. 'Hub

[Jackdog]

If she's planning on filing BK anyway why not just have her to do it before the marriage. Then you won't have to worry about anything as far as her credit, joint bank accounts or any of that once you're married.

[BKDefender]

Down @ Out
I'm in Nevada which is also a community property estate. Once you're married all of your post-marital earnings are community property, and your new spouse has separate property claims to one-half of the community property. As such, here in Nevada, a pre-marital creditor can garnish 50% of the post-marriage income of the new spouse to satisfy pre-marital debt.
Further, the Malmquist v. Malmquist [106 Nev. 231, 240, 241, 792 P.2d 372 (1990)] case spells out how the Nevada courts determine the apportionment of separate property claims to the new spouse when mortgage payments are paid from post-marital wages (i.e. community property wages.) If you are making payments on the mortgage with community wages then the principle that is paid off by those payments is community property so pre-marital creditors can get a judgment against your new spouse and then file a lien against that small increase in her separate property interest in your home.

I don't know what state you are in, but most community property states follow a similar type of apportionment.

In short - your soon-to-be wife should seriously consider filing bankruptcy before you two get married to eliminate any risk of her creditors being able to come after her 50% of your community property wages and 50% of her eventual separate property claim of the community property claim in your currently separate home.

--William

[down @ out]

Hello Williamy ,

Thanks for the advice. We live in Nevada also and I was of the opinion that debts incurred before the marriage were not the responsibility of the spouse.

Are you saying that all of the debts she has before the marriage are now my problem?

The house is under water and are you saying that even if she does not work that the creditors can get a judgment?

Thanks for you advice.


Down @ Out

[BKDefender]

They are not ALL your problem, but if she is sued and the creditors get a judgment, then they can attach yours and her wages to satisfy a pre-marital debt. Remember the rule - half of your community wages are hers and half of her community wages are hers. In Nevada, if there is inadequate separate property to satisfy a debt, judgment creditors are allowed to take up to 50% of the community property assets to satisfy pre-marital debt.

If the house is underwater, they'll still record a lien but they won't get anything out of it when the house is sold.

In your case - if your credit and financial situation is good, then your future wife should file bankruptcy before you get married, to avoid a bankruptcy affecting your credit history too.
But if you're considering filing bankruptcy as well, then it costs less for both of you to file jointly after you're married.

--William
(free BK consultations btw)

[down @ out]

Hello William,

Looks like we were about to get into a real mess.

Seems like the long arm of her debts will cross over to find me.

One question: If we were to get married in a non-property state or say Mexico would that effect any of this. It would seem to me if we got married in Mexico the marriage would be recognized in Nevada but not necessarily affected by Nevada law.

Thoughts?


Thanks

[BKDefender]

It is not where you get married, it is within which state you reside during your marriage.

If it depended on where you lived, then everyone in non-community property states who got married in Las Vegas chapels would have a bear of a time with their finances.

--William

[down @ out]

Hello William,

I want to thank you for your kindness and helping during this difficult time.

Your advice has been better than gold and I would have gotton myself in quite the pickle.

While it seems pre-martial debts are not owed by me the post martial community property,(including my income) is fair game for anyone.

If we had gotton married before her getting through the bankruptcy I can tell you it would have probably destroyed both of us.

A tip of the hat to you.

[down @ out]

One more thing. Because of physical issues I will be the only one working.

Doesn`t seem right but I guess it is legal.

Imagine her creditors couldn`t care less since her previous husband is broke.

Man what a mess to avoid.

[down @ out]

Hello Wiliam,

Hopefully you can give us advise on one other point.

In Nevada a man and woman can become domestic partners.

My insurance plan would cover my partner if we are legally domestic partners.

Is this a way she can get medical insurance until after her bankruptcy that would protect me from the evil ways of the creditors?

We would get married after the bankruptcy goes through.

Thanks for you advice.

Man this is a mess.

[jwmc1]

Why would anyone get married prior to getting this settled regardless of the loaws in your state. Do you realize how much stress you will be starting your marriage with if you do this? Get that cleared up way before you get married.

[down @ out]

Hello JWMC,

Your points are well taken.

I just wanted to get married now because we have strong feelings for each other and she is without any medical insurances and has some physical issues.

We are not young folks and being with medical insurance can be a real problem.

I just didn`t realize that creditors would be so selfish. Those debts aren`t mine and the reality is after the marriage the only income is mine anyway.

thanks,