Community Property States

[bellessima]

Wise of you to look up the statutes, you are making me look bad, lol. You are correct, according to the state law, inheritance is not community property regardless of when acquired. And property obtained prior to marriage is non-community property, that is a general rule that most comm. prop states use.

You can file a bk if you have exempt or non-exempt asset's, if they are not exempt they will be taken by the trustee to liquidate. Unless you do a Chapter 13 to which you can keep the property, but you must pay its value to the creditors anyway, they must receive just as much money if you filed a Chapter 7.

Forgive me, My intent was to clarify and I appreciate you reply.

Tell me, If I have a non exempt asset and pay its value to the trustee, I can then keep the asset?

and my CC debt will be eliminated in a Chapter 7?

[optimistic1]

Wise of you to look up the statutes, you are making me look bad, lol. You are correct, according to the state law, inheritance is not community property regardless of when acquired. And property obtained prior to marriage is non-community property, that is a general rule that most comm. prop states use.

You can file a bk if you have exempt or non-exempt asset's, if they are not exempt they will be taken by the trustee to liquidate. Unless you do a Chapter 13 to which you can keep the property, but you must pay its value to the creditors anyway, they must receive just as much money if you filed a Chapter 7.

[bellessima]

If you are married at the time of it being inherited, it is now part of the community as a whole.

If the debt was incurred living out of a community property state, it wouldnt really matter, it all depends on why you see that as an issue. In non-community property states, if one spouse files, the other isnt responsible for it anyway, unless they signed a contract that explicitly states otherwise, or if it was a joint account.

By getting divorced before filing you now have extinguished the community property state phantom/hypothetical discharge for the non-filing spouse. In fact, if you filed a BK, and only had one spouse file, but included all of the community debt, the non-filing spouse would be protected up until you divorce one another, so if you plan on divorcing, then you need to file a joint petition, or the creditors will have a right to seek the money from you because you are no longer a community.

This is where people get mixed up about how a spouse can be held liable for the other spouses debts, it can happen, but under certain circumstances, such as the one I explained to you. Divorce, death, etc can eliminate the phantom/hypothetical discharge. Now the big question is this, will the creditors even bother, most likely upon discharge from the bk court, they will file everything in some warehouse and forget about it.

That doesnt mean that both of you cant still file seperate bk's from one another. This is why most attorney's will just suggest that both of you file to eliminate the complexities of the comm prop laws, divorce laws and bk laws. If you decide to have one spouse file, include all of the marital debt, and see how the local court will rule on the matter, I am sure they interpret the same way that the IRS does.

I am referring to AZ, please pm me if you are in need of a BK/Family law attorney, I know of a few that are familiar with community property laws.

[optimistic1]

If you are married at the time of it being inherited, it is now part of the community as a whole.

If the debt was incurred living out of a community property state, it wouldnt really matter, it all depends on why you see that as an issue. In non-community property states, if one spouse files, the other isnt responsible for it anyway, unless they signed a contract that explicitly states otherwise, or if it was a joint account.

By getting divorced before filing you now have extinguished the community property state phantom/hypothetical discharge for the non-filing spouse. In fact, if you filed a BK, and only had one spouse file, but included all of the community debt, the non-filing spouse would be protected up until you divorce one another, so if you plan on divorcing, then you need to file a joint petition, or the creditors will have a right to seek the money from you because you are no longer a community.

This is where people get mixed up about how a spouse can be held liable for the other spouses debts, it can happen, but under certain circumstances, such as the one I explained to you. Divorce, death, etc can eliminate the phantom/hypothetical discharge. Now the big question is this, will the creditors even bother, most likely upon discharge from the bk court, they will file everything in some warehouse and forget about it.

That doesnt mean that both of you cant still file seperate bk's from one another. This is why most attorney's will just suggest that both of you file to eliminate the complexities of the comm prop laws, divorce laws and bk laws. If you decide to have one spouse file, include all of the marital debt, and see how the local court will rule on the matter, I am sure they interpret the same way that the IRS does.

I am referring to AZ, please pm me if you are in need of a BK/Family law attorney, I know of a few that are familiar with community property laws.

[bellessima]

I hate to disagree with you because you are a moderator, but I have researched this topic, and had several consults with BK and family law attorneys in my state, which is a community property state. The non filing spouse is not responsible to pay anything after the other spouse files a bk on behalf of the community, I had more than one board certified BK attorney's tell me the exact same thing.


If one spouse files a bk in a community property state, the other receives an equal discharge of the community debt. This also is clearly written in the NOLO Bankruptcy book, and even the IRS references the hypothetical discharge of the non-filing spouse in a community property state.

When one spouse files for bankruptcy the nonfiling spouse in effect also receives a discharge, because the community property owned by both spouses is protected against marital debts, so long as the parties are living and stay married. When those debts are discharged through bankruptcy, they are discharged completely, and so both spouses end up being equally absolved of that responsibility. Because one spouse has his or her debts discharged without even having to file, we refer to this as a "phantom discharge."


It doesnt matter who's name is on the card, in a community property state, you are seen as one entity, so if one spouse files, they are filing on behalf of the community as a whole, and the debt will be discharged from the community as a whole.

Any creditor challenging this will lose, and any attempts to collect the discharged debt from the non-filing spouse will be a violation, plain and simple.

What if the non filing spouse has inherited assets?and

What if some of the CC debt was acquired before living in a community property state?

If the debt was acquired during the marriage and now they are divorcing before filing the BK petition......??

What Community Property state are you referencing to?
I am in AZ

Thanks

[optimistic1]

No, this isn't the case.

In a community property state, all debts incurred during the marriage while living in the community property state are the equal responsibility of both parties to pay back. If one member of a couple living in a community property state files bankruptcy, then the spouse becomes responsible to pay back all debt incurred while they were married and living in the community property state.

There are a few partial exceptions depending on the state involved, because there are differences between the community property state statutes. You need to discuss this with several experienced bk lawyers in your state during your free initial consultations to find out what you will be held responsible for and what you won't if your spouse (or ex-spouse) files first. And of course, if you file first, then all the debt shifts towards your spouse and it's up to him/her to sort out what to do.

I hate to disagree with you because you are a moderator, but I have researched this topic, and had several consults with BK and family law attorneys in my state, which is a community property state. The non filing spouse is not responsible to pay anything after the other spouse files a bk on behalf of the community, I had more than one board certified BK attorney's tell me the exact same thing.


If one spouse files a bk in a community property state, the other receives an equal discharge of the community debt. This also is clearly written in the NOLO Bankruptcy book, and even the IRS references the hypothetical discharge of the non-filing spouse in a community property state.

When one spouse files for bankruptcy the nonfiling spouse in effect also receives a discharge, because the community property owned by both spouses is protected against marital debts, so long as the parties are living and stay married. When those debts are discharged through bankruptcy, they are discharged completely, and so both spouses end up being equally absolved of that responsibility. Because one spouse has his or her debts discharged without even having to file, we refer to this as a "phantom discharge."


It doesnt matter who's name is on the card, in a community property state, you are seen as one entity, so if one spouse files, they are filing on behalf of the community as a whole, and the debt will be discharged from the community as a whole.

Any creditor challenging this will lose, and any attempts to collect the discharged debt from the non-filing spouse will be a violation, plain and simple.

[lrprn]

Are you saying that even though we do not have joint CC's that his filing alone will discharge my CC debt ?

No, this isn't the case.

In a community property state, all debts incurred during the marriage while living in the community property state are the equal responsibility of both parties to pay back. If one member of a couple living in a community property state files bankruptcy, then the spouse becomes responsible to pay back all debt incurred while they were married and living in the community property state.

There are a few partial exceptions depending on the state involved, because there are differences between the community property state statutes. You need to discuss this with several experienced bk lawyers in your state during your free initial consultations to find out what you will be held responsible for and what you won't if your spouse (or ex-spouse) files first. And of course, if you file first, then all the debt shifts towards your spouse and it's up to him/her to sort out what to do.

[redroses]

In community property states, all property the couple acquires during the marriage is divided equally. Issues such as financial need, ability to earn income or fault are not taken into account when dividing property during a divorce settlement.
simulation credit immo

[bellessima]

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.

Are you saying that even though we do not have joint CC's
that his filing alone will discharge my CC debt ?
I am still paying mine and he has stopped paying,

Are you saying that I should stop paying my CC and even though I am not filing for BK my CC will be discharged?

Thanks

[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

[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.

[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

[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?

[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.

[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?