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Community Debts - a newbie question
Donny:
correct, but there is no bright-line rule about filing one or both.
Consider:
car wreck and filing spouse dies.
30% default rate of interst.
spouse will owe 2 times a much in three years. Will the nonfiling spouse be able to file or be over the UST $60k to $70k, too much debt limit?till get a discharge, but at 2 or 3 times the cost. And if he discharge is denied in the second case, you will get sued.
There are a lot of debtors these days who have to file "now", 'cause in a few months the debt will draw the UST's attention.
What about creditors who have recorded judgments? The entire proprety comes into the first case, so you should be able to remove the judgment from the house, but make sure you do it.
I have filed the crook's wife into a 13, gotten a discharge, then had to fight off a succession of lawyers who take the case later, and do not understand bankruptcy. I have to send them copies of cases and convince them to stop.
This isa long discussion with clients, where the client makes the decision.
dennis
Donny:
correct, but there is no bright-line rule about filing one or both.
Consider:
car wreck and filing spouse dies.
30% default rate of interst.
Interest continues to run after the 1st files, so nonfiling spouse will owe 2 times a much in three years. Will the nonfiling spouse be able to file or be over the UST $60k to $70k, too much debt limit? Yes you can prove up the real debt and the interest accrual and maybe still get a discharge, but at 2 or 3 times the cost. And if he discharge is denied in the second case, you will get sued.
There are a lot of debtors these days who have to file "now", 'cause in a few months the debt will draw the UST's attention.
What about creditors who have recorded judgments? The entire proprety comes into the first case, so you should be able to remove the judgment from the house, but make sure you do it.
I have filed the crook's wife into a 13, gotten a discharge, then had to fight off a succession of lawyers who take the case later, and do not understand bankruptcy. I have to send them copies of cases and convince them to stop.
This is a long discussion with clients, where the client makes the decision.
dennis
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You are generally correct, but each case is different and specific facts may
require a different response.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
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X-eGroups-Edited-By: easky1
OK, I will respond to this email to check my understanding as well.
1) The nonfiling spouse will not have a bankruptcy appear on their
credit report under the public records section. However, since all
community debt incurred during the course of the marriage must be listed in
the filing spouse's petition (even if the non-filing spouse has a credit
card ONLY in the non-filing spouse's name ), that debt gets discharged, and
it is likely that an individual trade-line on the credit report will show up
as "included in bankruptcy."
2) The non-filing spouse's sole and separate property is not protected
by a "community discharge," which includes any inheritance the non-filing
spouse might receive in the future.
3) The "community discharge" only lasts as long as the community does.
So, if the community dissolves due to death or divorce, then the creditors
can come after the non-filing spouse for any community debt that was
discharged in the bankruptcy.
Brand & Spellman PC
4105 E. 7th St.
Long Beach, CA 90804
562-438-7500
888-99-BKRPT (888-992-5778)
www.brandspellman.com
This message originates from the law firm of Brand & Spellman PC and may
contain legally privileged and confidential information intended solely for
the use of the addressee. If you are not the intended recipient and have
received this message in error, please notify us at info@brandspellman.com
and delete this email from your system. Any unauthorized reading,
distribution, copying, or other use of this email or its attachments is
strictly prohibited.
The post was migrated from Yahoo.
OK, I will respond to this email to check my understanding as well.
1) The nonfiling spouse will not have a bankruptcy appear on their
credit report under the public records section. However, since all
community debt incurred during the course of the marriage must be listed in
the filing spouse's petition (even if the non-filing spouse has a credit
card ONLY in the non-filing spouse's name ), that debt gets discharged, and
it is likely that an individual trade-line on the credit report will show up
as "included in bankruptcy."
2) The non-filing spouse's sole and separate property is not protected
by a "community discharge," which includes any inheritance the non-filing
spouse might receive in the future.
3) The "community discharge" only lasts as long as the community does.
So, if the community dissolves due to death or divorce, then the creditors
can come after the non-filing spouse for any community debt that was
discharged in the bankruptcy.
Brand & Spellman PC
4105 E. 7th St.
Long Beach, CA 90804
562-438-7500
888-99-BKRPT (888-992-5778)
www.brandspellman.com
This message originates from the law firm of Brand & Spellman PC and may
contain legally privileged and confidential information intended solely for
the use of the addressee. If you are not the intended recipient and have
received this message in error, please notify us at info@brandspellman.com
and delete this email from your system. Any unauthorized reading,
distribution, copying, or other use of this email or its attachments is
strictly prohibited.
The post was migrated from Yahoo.
Okay, I am hoping to check my understanding here.
I keep running into clients that have community debts that want to file singly. The folks that I have encountered to date all have an idea that it's advantageous to have only one spouse file since it will allow the other to keep his or her credit rating intact. First, is that even correct?
Second, H & W incur community debts, and one party files Chapter 7 to discharge and the community discharge kicks in. And that's it? My understanding is that because the CP comes into the bk estate, the rationale is that the creditors are covered, but since most 7 cases have no nonexempt assets, it seems like maybe the thing to do is to recommend that all married couples to have only one party file. Is that correct? Thanks so much for your help.
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