Okay, thanks. Here we go:
1. Chapter 7
, i.e., liquidation bankruptcy, requires that the debtor must generally be unable to pay between $117 to $195 per month over a 5-year period. Bankr. Code
§ 707(b)(1)-(2). You clearly are not within that income realm, consequently, Chapter 7 is not an option.
2. Chapter 13
, i.e., individual debtor bankruptcy, requires the debtor's total noncontingent, liquidated secured debt must be less than $1,081,400 (and liquidated unsecured debt less than $360,475 for an individual debtor) for an individual debtor and spouse to be eligible for Chapter 13 relief. Bankr. Code § 109(e).
3. If Chapter 13 is not an option, then you must file Chapter 11, which is very similar, though some debts may be discharged in Ch 13 that cannot be discharged in Ch. 11. From what you've described this issue is irrelevant.
4. Assuming Chapter 13 eligibility (a) transferring your assets to your spouse can (and will) be challenged by the bankruptcy trustee
, because any asset transfer to an insider (which includes a spouse) that occurs within two years of the filing of the bankruptcy petition
is considered fraudulent. Bankr. Code 548(a)(1)(B). Consequently, your transfer of assets to your spouse will not be permitted. They will be subject to the bankruptcy estate.
5. Because of your short time in California, and because your previous residence in the UK is not a "U.S. State," you must use the federal bankruptcy exemptions. See this link for a brief explaination.
6. If your home has equity value greater than $22,975, then the bankruptcy trustee can sell the property to pay your creditors. Bankr. Code 522(d)(1). The exception is where you create a Chapter 13 bankruptcy plan that pays your creditors at least as much as they would have received had you filed for Chapter 7 and liquidated all of your debts.
7. Consequently, what you must do is determine were you to liquidate all of your assets at this time, would their value exceed the debt owed on the Cypress property, after subtracting all of your property exemptions. Note: retirement plan assets, established under U.S. federal law (e.g., 401(k); IRAs (up to $1,245,475)) are exempt in bankruptcy, so these assets do not count against you.
In sum, you need to sit down with a local bankruptcy attorney and "show your [financial] cards," so that you can completely determine if a Chapter 13/11 plan will be capable of discharging a substantial amount of your debt. If not, you may be better off trying to negotiate a settlement with the debt collector, because bankruptcy isn't free (a Chapter 13 will run you about $5,000, assuming no surprises).
If nothing else, the Ch. 13 would stop the debt collector from annoying you further, even if you were to have to confirm a 100% bankruptcy plan (your entire debt over 5 years).
That about covers the issue. If you need a link to a reputable bankruptcy lawyer referral service, please let me know and I will be happy to provide. And, thanks for using justanswer.com!