Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
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Be careful here.
First, you are in a community property state, so unless the settlement agreement states you are to be responsible solely for the debts, your spouse could still be on the hook.
Also, If any of these debts were joint, (or if you took on any of your spouse's debts) even with this agreement for you to be responsible, once you file bankruptcy, the lender is able to go back after your spouse for these debts, since they were contractually liable for them.
Then, the spouse can enforce the divorce decree to get you to still pay for these debts, even though you filed bankruptcy on them. Bankruptcy does not remove joint/cosigner liability for debts.
The only way to resolve this is to file a joint bankruptcy first, before the divorce is final, that way there won't be any debt that survives, save student loans etc.
You must keep the 401k in a rollover account or another 401k to preserve it's protection, so ask your attorney about how to do that properly.
Thanks for your question, good luck. As always, I recommend you review your case with a local bankruptcy attorney, most offer free consultations. Thanks
My husband was not on any of the credit cards as a co-signer. will that make a difference? 401k to preserve its protection in rollover, - can I take some of it out and rollover -what exactly does that mean? I want to eventually take money out in another 1year after I rejuevenate my credit. How should I do this?
Then you may be ok if there was no joint debts together, that is what to watch out for. If you withdraw any of the funds, then it loses the retirement exemption, and you would have to protect it with any other available exemptions if any. Discuss that with your bankruptcy attorney. Once the bankruptcy case is done, you can withdraw any that you want/need.
Thanks for your question, good luck.
What can I put it in to take out later other than 401k rollover? or should I do that? what are some available exemptions? I have hired a bankruptcy attorney yet.
California has 2 different set of exemption tables, so it would depend on which one matches up to your assets the best. I only recommend my clients to roll the money into a rollover IRA, or directly into a 401k. Talk to your divorce attorney about how to protect it from bankruptcy liquidation, they have come across the issue before I am sure. But I would seek out specific advice from a local bankruptcy attorney for specific case information.
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