Community Property State - I'm worried!

[bluestarCVO]

Hello all! This is my first post here and I'm hoping I can get some help. I live in Louisiana (community property state) and am wanting to file Ch. 7, as I see no other way out of my financial situation.
The problem is that I am going to have to file alone, as my wife filed Ch 7 in 2005, before we were married. But now, after reading many posts on here and talking to an attorney, I am scared that the creditors are all just going to go after her and get a judgment, followed by a wage garnishment.
All of the debt is in my name only, except for a vehicle that is in both which I will be reaffirming. I have about $18,000 spread over 5 cc's, a $3,500 personal loan at the credit union, $5,000 in medical bills, and I owe about $8,000 on a repo. We were struggling but making it until our daughter was born a few months ago, but now with all the added expense, I just can't keep up with the payments.The attorney I consulted with did assure me that it would be VERY unlikely that they would come after her, but I'm not sure if I trust him.
Does anyone have personal experience with a similar situation? Do you think they will come after her or is it truly unlikely? And if they do come after her, can they garnish her wages? Any help/advice would be greatly appreciated. I do plan on consulting with a few other attorneys, but in the mean time I'm hoping for some help on here.
Thanks for your time!

[despritfreya]

Generally in community property states, when you file a bk you are filing for yourself AND the community, even if your spouse does not file. In a community property state, with a few exceptions, any debt incurred during the marriage is the responsibility of both husband and wife since it is a "community" obligation. YOU will receive a "community" discharge. For so long as there is a "community", your discharge will protect your spouse.

In my state, due to the community discharge, while a creditor could sue the non-filing spouse, the judgment could only be satisfied with sole & separate property. As a result, and assuming the spouse does not have any sole & separate property (such as an inheritance or non-homestead real property or an asset acquired prior to marriage), the judgment is useless since, even wages are "community property".

You need to check whether or not a judgment obtained in your state against your wife's sole & separate liability could be satisfied out of "community" assets. If the answer is "no" then your wife will get the full benefit of your discharge so long as you remain married.

Des.

[bluestarCVO]

If a couple of creditors were to come after her, we would just try and take care of it then. I just worry that we will wake up one morning to find a levy on our bank account and/or a wage garnishment. Although, how could they levy our account since it is my money as well and I have been discharged. They would actually be taking some of my money as well which wouldn't seem legal since I was discharged under Ch 7.
Anyone have any personal experience with anything at all like this? This has me SO stressed.

[tcreegan]

Hi bluestarCVO,

Take a deep breath.....hold it....exhale slowly....

They can't come in the night and levy your account or garnish wages, these things have to follow a judgement suit in court, many months.

AND, as despiritfeya says, they can't come after community property b/c it gets discharged in the BK. Your only worry would be if your wife has a separate house or something she is hiding from you.......and then you would have some real problems!

Relax, and don't forget to spend time with your new daughter, congratulations!

Tom in Colo

[bluestarCVO]

Generally in community property states, when you file a bk you are filing for yourself AND the community, even if your spouse does not file. In a community property state, with a few exceptions, any debt incurred during the marriage is the responsibility of both husband and wife since it is a "community" obligation. YOU will receive a "community" discharge. For so long as there is a "community", your discharge will protect your spouse.

In my state, due to the community discharge, while a creditor could sue the non-filing spouse, the judgment could only be satisfied with sole & separate property. As a result, and assuming the spouse does not have any sole & separate property (such as an inheritance or non-homestead real property or an asset acquired prior to marriage), the judgment is useless since, even wages are "community property".

You need to check whether or not a judgment obtained in your state against your wife's sole & separate liability could be satisfied out of "community" assets. If the answer is "no" then your wife will get the full benefit of your discharge so long as you remain married.

Des.

I met with a new attorney today that confirmed everything you stated in your post. My wife's debt will be discharged as well as part of the "community", even though I am filing alone and even though she filed ch 7 in 2005. As long as we are married, she benefits from the discharge as well. Also, she has no sole and separate property, so we are good. This makes filing all the more worth it. We will completely have a fresh start. When I first learned that I was in a community property state, I was worried as I thought that was a bad thing. Turns out, it is a wonderful thing for us. All that worrying for nothing!
Obviously, the first attorney I met with did not have a clue, as he had mentioned none of this to me. He had even told me that I did not have to list my wife's debts at all, and that she would just keep paying her cc's as normal and would not be affected. My new attorney told me that this is not the case at all, and that I in fact am required to list her debts, even if they are only in her name. She informed me that it is "all or nothing".
On another topic, it is a good thing that I went and met with her this past week. Otherwise I would not have found out that I need to file ASAP! I just got a raise at work this past week and was worried about how it will affect the means test and my ability to file. I was told that I need to file before the end of October so that I will not have to include this month's income. I was always under the impression that I had to include all income up until the day I file. Found out that is not the case.
So, I'm happy to announce that I will be filing this Friday, October 29. I will be so glad to get this thing going and look forward to being debt and stress free! Wish me luck!

Carl in Louisiana

[optimistic1]

Be careful though, if your wife's creditors file a timely objection to discharge of the non-filing spouse, her debts could potentially stick, and a community discharge would not be granted, because the rule is 8 years. They most likely will not file the objection and it will be discharged.

Speaking from personal experience, I can tell you that trying to remove the debt from her credit report will not be so easy. I have tried to remove mine on the basis that the one spouse's bankruptcy should discharge all of the debt, the credit reporting agencies do not see it that way, trust me I have tried.

Her option is to wait it out until it drops off the credit report, or 8 years from 2005, file her own Chapter 7 to remove the debts from the credit report.

[bluestarCVO]

Be careful though, if your wife's creditors file a timely objection to discharge of the non-filing spouse, her debts could potentially stick, and a community discharge would not be granted, because the rule is 8 years. They most likely will not file the objection and it will be discharged.

Speaking from personal experience, I can tell you that trying to remove the debt from her credit report will not be so easy. I have tried to remove mine on the basis that the one spouse's bankruptcy should discharge all of the debt, the credit reporting agencies do not see it that way, trust me I have tried.

Her option is to wait it out until it drops off the credit report, or 8 years from 2005, file her own Chapter 7 to remove the debts from the credit report.

I was worried about this same issue, and asked my attorney about it, being as my wife's ch 7 was only 5 years ago. Attorney said it did not matter because my wife is not actually filing or being discharged, the "community" is. If we were to divorce, she would then again become liable for her debts as she is no longer part of the "community." I was assured that the creditors cannot object on this basis.

[lindsay2181]

i too live in louisiana, and was concerned about the community property issue. i figured if a creditor gets a judgement they will go after my husband's paycheck as i am a stay at home mom with no paycheck of my own. the attorney i spoke to said it's possible, but he wasn't sure how likely since all the cc accounts were in my (maiden) name only. he says that some creditors are nervous about going after a spouse in community property states b/c of "wrongful seizure" and since there is a lot of grey area concerning community property and debt, often times they will not go after a spouse. just all depends on the creditor.

[bluestarCVO]

i too live in louisiana, and was concerned about the community property issue. i figured if a creditor gets a judgement they will go after my husband's paycheck as i am a stay at home mom with no paycheck of my own. the attorney i spoke to said it's possible, but he wasn't sure how likely since all the cc accounts were in my (maiden) name only. he says that some creditors are nervous about going after a spouse in community property states b/c of "wrongful seizure" and since there is a lot of grey area concerning community property and debt, often times they will not go after a spouse. just all depends on the creditor.

According to my attorney, your husband's wages would be protected in your situation. Even though it is technically only his income, it is still considered community property and the creditors cannot touch it as long as you are married. The "community" is protected with the discharge. The only thing the creditors would be able to get a judgement against is sole and separate property, such as an asset that was purchased by him BEFORE you were married. Or if he had an inheritance or anything like that they could get a judgement. But wages are protected no matter who is the one bringing home the bread.