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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15854
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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How can a husband with perfect credit protect his assets when

Resolved Question:

How can a husband with perfect credit protect his assets when his wife has racked up huge credit card debts IN HER NAME ONLY, when the house they both live in is listed with title as "a married man as his sole and separate property" with quit claim deeds signed by the wife years ago, and recorded with the county. If the wife goes BK can her creditors sue the husband because Calif is a community property state? Or does the quitclaim deed and the "sole and separate property" title shield the husband from her debts -- particularly since his name is XXXXX XXXXX ANY of the unsecired credit card debs?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 1 year ago.

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

This is a common situation,

WALLSTREETESQ :

CA is a community property State,

WALLSTREETESQ :

so if a bankruptcy is filed,

WALLSTREETESQ :

the debts discharged in her name only would be discharged on the spouse as well,

WALLSTREETESQ :

so they cannot go after the spouse,

WALLSTREETESQ :

if the spouse has the deed of the home titled "sole and separate property",

WALLSTREETESQ :

the creditors could not go after the property,

WALLSTREETESQ :

however in a bankruptcy the home would be part of the bankruptcy estate,

WALLSTREETESQ :

and could be sold to pay off creditors,

WALLSTREETESQ :

One of the greatest benefits that bankruptcy affords a non-filing spouse in California is the community discharge protection. When one spouse files for bankruptcy in California the non-filing spouse gets the benefit of a community discharge.

Customer:

How would the property be a part of the "bankruptcy estate" if my wife signed MULTIPLE quit claim deeds (a new one was signed every time a property was bought or sold) and if her name was never on title -- and if my name does not appear anywhere on any of her credit cards or credit card applications?

WALLSTREETESQ :

In a bankruptcy the Court looks at all property of the marriage,

WALLSTREETESQ :

and uses all household income and property,

WALLSTREETESQ :

for the husband to claim that the property is his only may be difficult if purchased after the marriage,

WALLSTREETESQ :

if it was purchased prior to the marriage, a good argument can be made that it should be considered separate property,

Customer:

I have gobs of Equity, like 200K in Equity or more -- is there any way I can shield this Equity from a BK judgement? Would some kind of clever (and I imagine expensive) Chapter 7 strategy work if she opted to go that way? I mean I'd rather pay a smart lawyer 10K than pay these credit card vultures the 65K she owes them -- they are charging her interest that is 'criminal' and I have no moral qualms about stiffing them since her interest and penalities far outstrip any value the goods she bought have/had.

WALLSTREETESQ :

was the home acquired during the marriage?

WALLSTREETESQ :

n California’s System 1, single homeowners who are not disabled may exempt up to $75,000 of the equity in their home or other property covered by the homestead exemption. You may exempt up to $100,000 if you live with a family member; $175,000 if you are 65 or older, or physically or mentally disabled; $175,000 if 55 or older, single, and earn a gross annual income under $15,000 or are married and earn a gross annual income under $20,000 and creditors seek to force the sale of your home. If you are married but separated, you may claim the homestead exemption in community property occupied by your spouse.


In California’s System 2, homeowners can exempt up to $24,060 of the equity in their home.

Customer:

I'm 58, how much could I exempt if I chose to go BK to protect my Equity? Also I could prove that the Equity that started this ball rolling (buying houses in California) came as the result of paying for a house well before we were married. I purchased my first house at 19 years old and wasn't married to my wife until I was 35 -- I used the proceeds from the sale of that house to buy my second house, then we we married and I have bought the 3rd and 4th houses during the marriage.

Customer:

Isn't she (or her creditors) only entitled to HALF my Equity in my house? Due to the community property laws???

WALLSTREETESQ :

Even if only one spouse files bankruptcy, all of the community property becomes property of the estate. Property of the estate, if not claimed exempt, is available to pay the community debts of both spouses through the bankruptcy

WALLSTREETESQ :

In your situation,

WALLSTREETESQ :

you would take a risk in her filing a bankruptcy,

Customer:

Advice? Do I tell her to try and negotiate with her creditors? Tell her try and find a LEGIT debt consolidation firm? (From what I've seen there are many, many scam operations out there). Could I put the house into a foreign trust? Is that legal?

WALLSTREETESQ :

what may be considered as an option is to deed the home to a LLC or trut,

WALLSTREETESQ :

trsut,

WALLSTREETESQ :

to get it out of your name,

WALLSTREETESQ :

and settle with the creditors for 50-30% of the balance, which they will accept in most cases.

WALLSTREETESQ :

Another option is to take out an equity loan from the home and limit your equity, and file a bankruptcy in a year or longer, this way you have limited equity in the property,

WALLSTREETESQ :

or you can use the equity to settle her debts.

WALLSTREETESQ :

A debt consolidation company will settle the debts for you at 50%,

WALLSTREETESQ :

and you pay them over 5 years,

WALLSTREETESQ :

That is an option as well.

Customer:

I'm in Southern California -- do you handle this kind of thing (the LLC) -- or do you know anyone who does this? As i said I'd much rather pay a lawyer 10 grand than these scumbag credit card folks 35 grand -- if I could do it LEGALLY. Do you know any NOT BOGUS credit counseling companies?

WALLSTREETESQ :

You would need an asset protection attorney to do this,

WALLSTREETESQ :

they can protect your assets from creditors,

WALLSTREETESQ :

in terms of settlement, I would try first yourself,

WALLSTREETESQ :

they will accept 50% at the start,

WALLSTREETESQ :

if not hire a counseling company,

Customer:

Could I buy an hour of your time -- or use this service again for more questions after I talk with my wife?

WALLSTREETESQ :

Yes, you can ask for wallstreet esq, and I can answer your follow up questions,

WALLSTREETESQ :

In terms of settlements,

WALLSTREETESQ :

she must stop paying the creditors for 2-3 months before offering any payment,

Customer:

Thanks - I'm going to try and print this out to show it to her. Sounds like my first course of action should be to look into putting my Equity into a trust a "lock box" that the creditors cannot gain access to -- they would have to sue and get a judgement first, right? before they could try and go after my house..?

WALLSTREETESQ :

yes,

WALLSTREETESQ :

if you have a real estate business already, it should be incorporated, and you can deed transfer the home to that corp,

WALLSTREETESQ :

Or create a new one, or trust to avoid this,

Customer:

Any Trust attorneys on that list you particularly know or like? I'm not a millionaire -- so hopefully I'd like to find someone savvy in protecting middle class folks like me...

WALLSTREETESQ :

I would contact your local bar association,

WALLSTREETESQ :

we are not allowed to give specific referrals,

WALLSTREETESQ :

you can also create one by using a company online such as legalzoom,

WALLSTREETESQ :

once it is established you would deed the home to it,

Customer:

Thanks -- i may get in touch with you via this system later -- i found you through 'Handel On The Law' -- so maybe they have some asset protection attorneys.

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask.

WALLSTREETESQ :

You can find several local trust and asset protection attorneys online in your areas, Good luck, and If satisfied please provide us with positive feedback, so we can receive credit

WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15854
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you

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