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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 11893
Experience:  JD, MBA
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My husband wants to individually file for Chapter 7 and I want

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My husband wants to individually file for Chapter 7 and I want to find out if my own assets are protected.

We live in California (community property) but keep most of our finances separate. In the past, we both contributed to a joint checking fund for shared household expenses, but kept other finances separate. My husband is no longer able to contribute to expenses, due to large accrued debts. He has his own business, which is failing financially, and I am a state employee with a steady paycheck. We've been married 15 years and have two dependent children.

We have a solid pre-nuptial agreement separating our finances and file taxes separately. I am sole owner of our house -- he filed a quit claim when we purchased it 6 years ago. All of my assets, including house and investments, are in a revokable living trust under my sole name.

Could I still liable for his debts if he files for bankruptcy? If I file for separation or divorce would my liability change?

Hello and thank you for allowing me the opportunity to assist you.

Generally speaking, your liability only extends to the community property. In other words, the community property can be taken to pay for your husband’s separate debts, but your separate property is not at risk. You have to keep in mind, however, an asset can be considered community property even if it is in your name alone. Generally speaking, in order to make community property become separate property, you’d need a written agreement. The prenuptial agreement may satisfy that requirement if it specifically states which assets are separate. But assets that were accumulated during the marriage, and that are not dealt with in the prenup agreement may be considered community property even if they are in your name alone. A divorce could help to the extent that a judge would divide the property … but the judge would also need to divide the debt, and he may order that your husband’s debts be paid with community property prior to distributing it (in other words, the result would be the same).

The botXXXXX XXXXXne is that you should consult with a knowledgeable local attorney who can help you determine what is community property and what is separate property. Once you’ve determined that, then you can make an intelligent decision about what to do next.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

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DISCLAIMER: Please be aware that only an attorney licensed in your state is authorized to advise you in legal matters, and that the limitations of this setting may prevent your legal issues from being thoroughly addressed. Accordingly, please understand that (1) by answering your question(s) I am not acting as your attorney, (2) my answer(s) should be construed as general information only, and (3) our discussion is not an adequate substitute for an in-person consultation with an attorney.

TJ, Esq. and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.
Thanks! My husband signed a quit claim when I bought my house -- does that remove th house from community property, for bankruptcy filing purposes?
The California Code states that you cannot convert real estate from community property to separate property unless you record a document expressly stating that the conversion took place. Therefore, the quitclaim alone is not enough. CLICK HERE for the CA Law.

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DISCLAIMER: Please be aware that only an attorney licensed in your state is authorized to advise you in legal matters, and that the limitations of this setting may prevent your legal issues from being thoroughly addressed. Accordingly, please understand that (1) by answering your question(s) I am not acting as your attorney, (2) my answer(s) should be construed as general information only, and (3) our discussion is not an adequate substitute for an in-person consultation with an attorney.


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