Community Property States

[CindyLou]

Community Property & Your Debt

In a community property states, debt acquired during the marriage (as opposed to debt acquired prior to the marriage) is owned jointly by both spouses and is divided upon divorce, annulment or death. Joint ownership is automatically presumed by law, unless there is specific evidence that would point to a contrary conclusion for a particular debt. If you live in a community property state (listed below), both spouses are held accountable for any and all debts acquired during the marriage, even if the account was is listed exclusively in one spouse's name.

Community Property States

The community property states are found most in the West, which has largely been influenced by the Spanish legal tradition from several hundred years ago. The exceptions of this are Louisiana (which comes from a French legal tradition) and Wisconsin (which adopted community property laws much later).

Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin

Note to Mods: Could we please make this a sticky, as I seem to be cutting and pasting this info much too often....

Thanks,

[lrprn]

Done

[optimistic1]

Community Property & Your Debt

In a community property states, debt acquired during the marriage (as opposed to debt acquired prior to the marriage) is owned jointly by both spouses and is divided upon divorce, annulment or death. Joint ownership is automatically presumed by law, unless there is specific evidence that would point to a contrary conclusion for a particular debt. If you live in a community property state (listed below), both spouses are held accountable for any and all debts acquired during the marriage, even if the account was is listed exclusively in one spouse's name.

And thus if one spouse files for a BK and the debt was aquired during the marriage, then a discharge of one spouse relieves the other, thus giving the non-filing spouse a phantom or hypothetical discharge.

[arami008]

Reading the nolo book it clearly states that even in community property states (I am in CA), that if one spouse files the other will receive the benefit as well...but in another page it says that either both file or the other one will be held responsible for the debt...???CONFUSED!!!

[optimistic1]

What other page are you talking about, because the truth is that under normal circumstances it is the latter, the non-filing spouse is discharged. There are complexities to this rule however, but for simple unsecured credit card debt, you need not worry about a thing.

[Mische]

Community Property & Your Debt

In a community property states, debt acquired during the marriage (as opposed to debt acquired prior to the marriage) is owned jointly by both spouses and is divided upon divorce, annulment or death. Joint ownership is automatically presumed by law, unless there is specific evidence that would point to a contrary conclusion for a particular debt. If you live in a community property state (listed below), both spouses are held accountable for any and all debts acquired during the marriage, even if the account was is listed exclusively in one spouse's name.

Community Property States

The community property states are found most in the West, which has largely been influenced by the Spanish legal tradition from several hundred years ago. The exceptions of this are Louisiana (which comes from a French legal tradition) and Wisconsin (which adopted community property laws much later).

Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin

Note to Mods: Could we please make this a sticky, as I seem to be cutting and pasting this info much too often....

Thanks,

Wow, thanks for this.

[dantan]

As a mortgage broker - I saw on ore than one occasion one spouse refinance their home and file a quit claim to get the other spouse off the loan. The other spouse unknowing of what their ultimate goal was, would agree. They would get divorced and the property would belong to the person whose name was on the refinanced loan.

[Pizza]

What other page are you talking about, because the truth is that under normal circumstances it is the latter, the non-filing spouse is discharged. There are complexities to this rule however, but for simple unsecured credit card debt, you need not worry about a thing.

That is the part that really confuses me. Hypothetically, if the non-filing spouse does not owe any personal debts at the time the filing spouse files, what is there to discharge? What I would really like to know is what the size of the hit would be to a spouse that owes no debt?

[optimistic1]

Nothing, but the argument lies in the fact that some believe, including creditors, who are both wrong, that unless the non-filing spouse also files, that he is responsible for the husband or wifes debt, even if theyre name wasnt on the loan, and even if they didnt charge a single thing.

Unless the non-filing spouse is including his own debts, which hypothetically you could, because in a comm. property state, you are seen as one entity. Although, if you attempted to discharge those debts, your credit report would show BK on those accounts anyway, but the public record of the filing probably would not, because the name wasn't on the petition. And if you didnt do what I described above, and only had the spouse file on their CC's, then there would be no "HIT", to the non-filing, they would be unaffected.

But, some people on this forum have suggested that Junk Debt Buyers, would try to fight it, but they would have no case whatsoever, and I would blow them off if they even tried.

[arami008]

Unless the non-filing spouse is including his own debts, which hypothetically you could, because in a comm. property state, you are seen as one entity. Although, if you attempted to discharge those debts, your credit report would show BK on those accounts anyway, but the public record of the filing probably would not, because the name wasn't on the petition.

So you are saying that if I include the one and only debt my husband has (2k) in my bk it would show up as DIBK or something on his credit report?

As of now there are like 5 of my charged off accounts on his credit reports anyways...will those also say DIBK or only discharged??

Might as well include it if the 5 that are on his CR will show up as included in BK...right?

[optimistic1]

Correct, that specific debt would most likely just say discharged in a Ch.7, without the public record attachment.

But its speculation at best, I really couldn't say.

The charged off accounts would just say discharged in a Ch.7 on his credit report.

You can include it, but you will need to hire a reputable attorney who is familiar with the state laws, bk laws, and comm prop. laws in order to try and include his debts, without putting him on the petition.

[bellessima]

Quote:Originally Posted by CindyLou
Community Property & Your Debt

In a community property states, debt acquired during the marriage (as opposed to debt acquired prior to the marriage) is owned jointly by both spouses and is divided upon divorce, annulment or death. Joint ownership is automatically presumed by law, unless there is specific evidence that would point to a contrary conclusion for a particular debt. If you live in a community property state (listed below), both spouses are held accountable for any and all debts acquired during the marriage, even if the account was is listed exclusively in one spouse's name.

And thus if one spouse files for a BK and the debt was aquired during the marriage, then a discharge of one spouse relieves the other, thus giving the non-filing spouse a phantom or hypothetical discharge.


Question:

In a Community Property State AZ

We are trying to decide to divorce before or after a Ch 7 filing.


My spouse and I have agreed to be responsible for our own CC debt in a divorce. Once we have the decree:

He will then be filing for Ch 7.
1) Should he include my CC debt in his filing?
2) Will his CC companies ever be able to come after me for his debt?

[LuciluS]

Quote:Originally Posted by CindyLou
Community Property & Your Debt

In a community property states, debt acquired during the marriage (as opposed to debt acquired prior to the marriage) is owned jointly by both spouses and is divided upon divorce, annulment or death. Joint ownership is automatically presumed by law, unless there is specific evidence that would point to a contrary conclusion for a particular debt. If you live in a community property state (listed below), both spouses are held accountable for any and all debts acquired during the marriage, even if the account was is listed exclusively in one spouse's name.

And thus if one spouse files for a BK and the debt was aquired during the marriage, then a discharge of one spouse relieves the other, thus giving the non-filing spouse a phantom or hypothetical discharge.


Question:

In a Community Property State AZ

We are trying to decide to divorce before or after a Ch 7 filing.


My spouse and I have agreed to be responsible for our own CC debt in a divorce. Once we have the decree:

He will then be filing for Ch 7.
1) Should he include my CC debt in his filing?
2) Will his CC companies ever be able to come after me for his debt?

If you are listed as a Joint Owner on any of his Credit Cards, he files Ch 7, those credit card companies will come after you immediately after his Ch. 7 is completed. CCs' don't care what is stated in your divorce decree. You can try to remove your name, but it takes several months and most likely his credit will not stand alone without your credit.

I know as I just went through this in AR. DH and I thought we had removed my Ex from a credit card in 2005. We filled out the paperwork and mailed it via regular mail. In the divorce decree, It stated I was responsible for this one significant credit card.

I pay the bills and was receiving Paperless statements through another check writing dotcom . What appeared on my screen was charges for the month, payments received, next month's due date & minimum payment.

When gathering information to formulate an Income vs. Expense for Dh and I last Sept., I printed a Full Statement and found my Ex's name listed. We met with a BK Attorney later that month & he informed informed me my EX would be held accountable for the balance. He told me to let him hang himself as he should have checked his credit reports. I couldn't do that as he is the father of my Son and the grandfather of my 3 precious grandchildren.

I strongly suggest you seek advise through your Divorce Attorney and/or Bankruptcy Attorney.

Luci

[optimistic1]

In a community property state, you are seen as one entity in the courts eyes, and you can effectively discharge all marital debt in a Chapter 7, and only have one spouse file the petition. Some creditors may think they can come after you, but it would be a waste of time, you can simply mail them the discharge letter and tell them go to hell. If they sue you, file an answer with the court, and bring your discharge paper, your case will be dismissed.

That is why most attorney's will simply tell you to be on the petition as well, so you dont need to deal with headaches like that. But if you hire a very knowledgeable attorney, who is familiar with the laws in AZ, then you can go the single filer route, although, your credit report will still show BK discharges on your accounts, you wont walk away scotch free.

I would file the BK first, and do a joint petition, then file your divorce afterwards. Otherwise, it will cost both of you more money in the long run, as you would both need to hire an attorney for each one of you, and file your own petition with the court, as opposed to a joint filing.

Consult with a experienced, BK/Family Law attorney in your area.

If you PM me, I can give you a link to a reputable law firm, who specializes in both of those fields.

[redroses]

My husband and I have been married 48 years and I bought the home that we live in today in 1994 and his name is not on the deed. I got the financing in my name and the bank ask if his name was to be put on the deed and I said no and nothing else was ask about him at all. I am the one that had to be 65 to get the reduced taxes.
simulation credit immo