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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33867
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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In California. Husband filed personal bankruptcy listing

Resolved Question:

In California.

Husband filed personal bankruptcy listing our jointly owned property. I am living separately, no legal separation or divorce filed.

Jointly owned property being sold - can I ask for half of proceeds or does bankruptcy court have full right to determine distribution of proceeds.

Husband trying to hurry me into signing sale agreement.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 1 year ago.
Under both federal bankruptcy and state community property law, all community property becomes the property of the bankruptcy estate, subject to the trustee's control during the bankruptcy process. Bankr. Code 542(a)(2). So, your husband was required to list all jointly held property.

At the close of bankruptcy, any community property acquired after filing of the bankruptcy petition cannot be reached by creditors of either spouse to satisfy any prepetition claims. Bankr. Code 541(a)(3). This gives you and your spouse a fresh start on the community property, despite your not having filed bankruptcy.

I don't know why your husband is trying to get you to sell the property, because he can't sell without the bankruptcy trustee's consent. Seems either fishy or maybe just uninformed. If your spouse were to pocket the sales proceeds, his bankruptcy would be dismissed and he would be at the mercy of his creditors.

Hope this helps.
Customer: replied 1 year ago.

Thank you for the prompt reply I am confident I am not hearing the whole truth.


 


OK, so, I understand anything we acquire together after bankruptcy cannot be reached by creditors but we have such bad credit and no cash so that is not an issue,


 


 


Husband is involved in Africa scam, mortgaged all properties to full and beyond full value and exhausted business assets. Continues to send cash to Africa weekly.


 


CPA listed these on financials as "investment" IRS agrees. $3 mil plus has been sent over past 10 years.


 


This is one of several jointly held properties listed in the bankruptcy


 


and he may well have been directed to sell it by the court.


 


This is one of three that are not mortgaged for equal or more than their value.


 


To clarify, are you saying:


 


The sale proceeds would be subject to creditors claims - all proceeds? not just 50%.


 


I am living separately - want to know my rights but I think you are telling me I am out of luck.

Expert:  socrateaser replied 1 year ago.
All sales proceeds are subject to the debts of your spouse (or you), incurred prior to the bankruptcy filing. Based upon what you've described as to the amount of debt involved, there will likely be nothing left of the community property.

My one concern here is that this investment in Africa may actually be a means by which your spouse is siphoning off assets to a source that he actually controls -- and that after bankruptcy, he will be able to access these assets. This would be a fraud -- but, it could be difficult or impossible to prove.

Note: I'm not accusing your spouse of anything here -- I'm just speculating about possibilities. There may be no means for you to find the truth, regardless.

Hope this helps.
Customer: replied 1 year ago.

Again, thanks for the prompt response,


 


Yes, I have always understood there is a possibility this is the case, that he is hiding money offshore -


 


however, he is suffering terribly because his - not to mention my - world is crashing, being held up by a melting ice cube, and I do not believe he would allow himself to suffer this much intentionally. Even his health is in jeopardy and he is not faking the trips to the ER. He is seriously ill and in denial about that as well.


 


He only gives a fig about me because he needs me to be his slave in the office (I rebelled and quit) and I have to sign off on the documents to sell the property


 


and he needs the image of a nice little wifey to cover up his serial adultry.


 


He loves himelf very much and I have learned thru counseling that as a narcissist he cannot believe others would lie to HIM.


 


Financial problems abound with narcissists, they are usually bright enough to earn large sums of money but cannot hold on to it or manage it at all. Most won't hold jobs because they cannot bear to be under the control of any other person - mine was always self employed. I didn't understand at the time.


 


They feel they are better than, smarter than and deserve more than others, especially their significant others.


 


And yes, he has set everything up so it is defendable or completely deniable, so the truth is known only by him and his creator.


 


The fact that the AFrican funds have been entered into business financials as an investment and IRS has accepted this helps me if ever he does get some money from it. The contract he is chasing is 60 million dollars, the CPA, who is reputable and well connected in our City, has also invested and is also suffering for that greedy decision.


 


Perhaps I can get him to sign that he will not attach my state pension should we divorce in return for signing off on the sale of the property.


 


 


Would such a document hold up if challenged? Perhaps I can get one from my pension administrator - hmmmmmm

Expert:  socrateaser replied 1 year ago.
A postmarital agreement is enforceable, however unless each parties are represented by legal counsel, the court can set aside the agreement as procured by undue influence.

Moreover, your spouse will need consent from the bankruptcy trustee to enter into the agreement.

So, if you want to do this, then you'll have to hire a lawyer -- otherwise, there's a good chance that the court may refuse to enforce the agreement.

Hope this helps.
Customer: replied 1 year ago.

I see, thank you for that invaluable information.


 


One last question, honest. You have been delightful. I plan to refer your service to my friends. I am attending WEAVE, which is Women Escaping a Violent Environment and the other ladies need legal advice from time to time.


 


WEAVE provides help with safety issues - attorneys who help with legal custody and restraining orders but they don't have the resources to help with financial questions.


 


And I have no money to engage an attorney or I most certainly would.


 


This service is very helpful, I intend to give an excellent review and come back in the future.


 


That said,


 


Can creditors attach my retirement if/when they get judgments.


 


 


 


My spouse implied he was "protecting" me when he filed bankruptcy in his own name.


 


It appears I am only protected from being fully informed and have no control whatsoever over how our jointly owned assets will be disposed.


 


If something happens to my spouse, then I am totally - 100% liable for every debt. Then, I would be prudent to file personal bankruptcy.


 


Oh well, I will keep you in mind if I do divorce, are you located in or close to Sacramento California.


 


Remember my story when you are having a bad day,


 


there is even more than what I have shared (His Mom's trust, death in 2007 and trust not distributed yet due to his sisters malfeasance) and ..........................................I unstand he does not have to share his inheritance. I hope he can hold on to something for the children to inherit, but there are problems there as well.


 


There are assets owned by our business, a corporation to which I am an officer - some trucks and equipment with no loans on them but he can sell them as he is also an officer, President of Corp and can sell without my permission, pocketing the money as the company assets were not listed in the personal bankruptcy. But again, I cannot stop the sale nor can I force him to share any such proceeds from vehicle and equipment sales. Business is dead because he has drained all working capital - it is insolvent.


 


Oh well, many ladies have had worse happen. Some have been murdered by their spouses on top of all of these types of problems,


 


I am looking forward to a quiet, peaceful life away from this madness, gratreful my children are grown.


 


With much appreciation.


 


 

Expert:  socrateaser replied 1 year ago.
Can creditors attach my retirement if/when they get judgments.

A: No. Cal. Code Civ. Proc. 704.110(b).

My spouse implied he was "protecting" me when he filed bankruptcy in his own name.

A: See above.


It appears I am only protected from being fully informed and have no control whatsoever over how our jointly owned assets will be disposed.


A: Correct.


If something happens to my spouse, then I am totally - 100% liable for every debt. Then, I would be prudent to file personal bankruptcy.

 

A: Correct.


Oh well, I will keep you in mind if I do divorce, are you located in or close to Sacramento California.


A: I'm retired and not taking cases at this time. I do appreciate your interest, though.

 

Remember my story when you are having a bad day,

 

A: My dear, I could tell you stories that would make your hair stand on end. I do sympathize, though. Everyone's personal battle is the worst possible from their perspective.


There are assets owned by our business, a corporation to which I am an officer - some trucks and equipment with no loans on them but he can sell them as he is also an officer, President of Corp and can sell without my permission, pocketing the money as the company assets were not listed in the personal bankruptcy. But again, I cannot stop the sale nor can I force him to share any such proceeds from vehicle and equipment sales. Business is dead because he has drained all working capital - it is insolvent.


A: This wouldn't actually matter, because the bankruptcy trustee now owns all of the corporation stock, and it can liquidate that stock if it can find a buyer. This probably won't happen, but it could.


Oh well, many ladies have had worse happen. Some have been murdered by their spouses on top of all of these types of problems,


A: Murder is definitely worse -- though it does tend to eliminate any further issues. Seriously, though, I'm not making fun of the circumstance. Domestic violence can be a devastating emotional and physical experience. I've been there myself.


I am looking forward to a quiet, peaceful life away from this madness, grateful my children are grown.

 

A: As long as you keep your sense of humor, you can survive anything.

 

Hope this helps.


Customer: replied 1 year ago.

Your last two answers tickled me -


 


Much appreciation, enjoy your retirement. Can I request you next time I need help or do I get whoever is on duty at the time?

Expert:  socrateaser replied 1 year ago.
If you need to contact me again, please use this link, and the system will send me an alert.

Thanks and best wishes.
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33867
Experience: Attorney and Real Estate Broker -- Retired (mostly)
socrateaser and other Bankruptcy Law Specialists are ready to help you

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