Community Property States

[optimistic1]

If anyone knows collection law and community property rules, the IRS does. But of course, if I dont say someone else will, local rules apply, always consult with proper counsel before attempting anything, these rules apply solely to the Federal Govt and will supersede any state law. But it is still very informative, in regards to bankruptcy and the effects of discharge and other such rules.

This is what the IRS uses when collecting from citizens, and how community property rules apply, there are plenty of citations to case law and everything. Note the stuff at the end, its the best.

http://www.irs.gov/irm/part25/irm_25-018-004.html

[azpt22]

my wife owes about $200K due to a failed business. Around $120k is on credit cards, about $30K is taxes and the rest to vendors. Everything is under her name. I have good credit and have kept current on all my debt.... ie home loans, car loans, 1 credit card for about $1K. Can she file for bankruptcy without her creditors coming after me? That way I maintain my good credit. We are in Az and will meet with attorney next week. Thanks!

[WhatMoney]

http://www.azlegalmarketingconsultan...rty-state.html
.

[optimistic1]

my wife owes about $200K due to a failed business. Around $120k is on credit cards, about $30K is taxes and the rest to vendors. Everything is under her name. I have good credit and have kept current on all my debt.... ie home loans, car loans, 1 credit card for about $1K. Can she file for bankruptcy without her creditors coming after me? That way I maintain my good credit. We are in Az and will meet with attorney next week. Thanks!

As long as all of the debt was incurred during the marriage, and that there are no special circumstances around the individual debts. Granted, you will need to find an attorney that understands family law and bankruptcy law, and a full understanding of how they mingle with each other when filing bk.

[WhatMoney]

As long as all of the debt was incurred during the marriage, and that there are no special circumstances around the individual debts. Granted, you will need to find an attorney that understands family law and bankruptcy law, and a full understanding of how they mingle with each other when filing bk.

He didn't say he was divorced. Any shared assets between his wife and him in his community property state might be reason to come after those assets. I suggest he read the link I provided and ask his lawyer.

[optimistic1]

He didn't say he was divorced. Any shared assets between his wife and him in his community property state might be reason to come after those assets. I suggest he read the link I provided and ask his lawyer.

I never even typed the word divorce in my post, and if you were really smart, you would understand why I typed family law, family law attorney's deal with very complex issues regarding debts when couples divorce one another, especially in community property states. You came across one little link on the net and your gonna come in here and start making people trip out about being in a community property state.

I'm talking after the bankruptcy discharge, not during the case, everyone knows in a community property state all of your assets are combined regardless, its no secret you need to research the internet for.

And like I said, if the debts were incurred during the marriage, then he should be safe, during and after the case is discharged, they are all community debts.

Yes, creditors can come after any community assets that belong to either spouse, the underlying issue is the debt, of which they are trying to discharge by having one spouse file on behalf of the community.

Further, he should worry about his sole and seperate property, inheritance, cars, boats, planes, houses that were owned by him prior to getting married. These are the types of property that a creditor could collect from the non-filing spouse in a community property state, even after a discharge for the community.

SOURCE: My case is exactly like his, I retained counsel that is in touch with the comm. prop. laws.

[WhatMoney]

You came across one little link on the net and your gonna come in here and start making people trip out about being in a community property state.

The article I referred to asked and answered this question: "If one spouse is filing an individual bankruptcy petition, is the other, non-filing spouse’s property part of the estate?"
And also this question on exemptions: "What about exemptions though? The non-filing spouse has to give up community property entirely but, because only one spouse is filing, can the couple still receive the benefit of combined exemptions?"

The article was entitled Bankruptcy in Community Property States, written by an Arizona bankruptcy law firm. The advice they gave (and I referred to) is the same as you just gave - so what is your problem? I didn't realize this was your own personal thread - I'll not try to help again.

[optimistic1]

They can "come after him" only in bankruptcy court, or after the community discharge for separate property. But if one files, they cannot continue any collection activity on the non-filing spouse or its a violation of the stay.

This is not my personal thread, but in your post you started stuffing words in my mouth, so I couldn't help it.

[optimistic1]

From Cathy Moran's Blog from her website,






The fact that debt collectors are only marginally acquainted with the law was highlighted today when a client reported that her ex husband had been told by a debt collector that the former marriage made him personally liable for his exwife’s debts.

There must be an emphatic, yet polite, word for b***s****. Wish I knew it… “Balderdash” seems so weak. In my most generous view, this could be debt collectors from outside of California who are clueless about community property law. Or, more realistically, they’ll say whatever they think will scare a payment out of someone.

For the record, living in a community property state such as California does not make each spouse personally liable for the contractual debts incurred by their spouse. If your spouse in California takes out a credit card and runs up a balance, you are not liable to the card issuer for the debt. The community property is liable for the debt, but you are not liable. If there is no community property, by reason of divorce or a marital property agreement, then only the person who contracted the debt is liable for it.

This is but one of the “whoppers” told by debt collectors. Engage skepticism when dealing with this breed.

http://www.moranlaw.net/blog/category/dealing-with-debt

[jetdsmom]

STUCK in credit score hell due to ex-spouse's bankruptcy

I am in Louisiana, and divorce was final in 2009. Community property has not been settled, and this included a very large mortgage. My ex decided to keep the house, and was court ordered to pay all expenses (mortgage, insurance, upkeep, etc) on the house after our separation. In the two years he was doing so (separation year and year since divorce), he has not paid most months expenses. The house went into foreclosure, went up for sheriff's sale, etc. When the winning bidder went to sign papers, we found out my ex had filed bankruptcy the night before. My family law attorney said I had no recourse until his bankruptcy was settled (a stay on community property because of his bankruptcy). Since his filing, he continues to default on the mortgage, but only by 2 months at a time...never 2 months and the 15 day grace period, which would allow the bank to pursue foreclosure again.

I contacted his bankruptcy trustee to see if there was anyway I could force the sale of the house. (We had several buyers VERY interested, including a cash sale, but my ex refused to sell.) I was told they could not offer legal advice.

Do I need to contact a bankruptcy attorney, or is there someone in this forum that may have suggestions. I feel like I'm stuck in a circle of closed doors, and just can't get answers. My credit is HORRIBLE because of my ex's failure to pay the mortgage over the last few years.

So, concerning community property that is tied up in one ex-spouse's bankruptcy case, how does the other ex-spouse distance themselves from that????

[dader]

Wisconsin old debt, new spouse

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 . . .

CindyLou, I hope you can help me ask the right questions when I go to see a lawyer. Here's my situation in a nutshell.

I bought a house in Wisconsin as a single person over ten years ago. Since January of this year I have both re-married AND lost my job. My spouse works and I'm looking, but we cannot afford to keep the house. We'd like to relocate out of state so keeping the house is not a priority. However, I'm looking at a shortsale (-$50k ~ $75k) or foreclosure, and I'm considering bankruptcy to discharge any residual debt.

I have no credit card debt, owe $15k on a car financed by the same bank that holds my mortgage, and a second mortgage for $10k also at the same lender. (a trifecta!)

The house and 2nd are solely in my name, the car (which I'd like to keep) is joint.

My spouse has a BK from 2004 and doesn't want to file again.

(hmmmm... this is getting to be a large nutshell!)

The main thing I'd like to know is, if I file solo BK in 2011 or 2012, what would be the possible impact on my spouse?

Should I default or drag out the foreclosure? Should we refi the car with another lender?

What other questions should I be asking?

Thanks! -da

[lovemybugs10]

What about the other side? I'm in MN. A non community property state.

I am an authorized user on his cards.

If he files bk and I don't, can they come after me? If it's a non community state- then it's his debt alone, right?

[SMinGA]

Right... AU is not responsible for repayment.

If he files bk and I don't, can they come after me? If it's a non community state- then it's his debt alone, right?

[lovemybugs10]

I keep reading conflicting info. Thanks!

[lovemybugs10]

Whoohooo, I just checked my credit. They stopped reporting as mine since we've moved to MN.