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Community Discharge
Dennis:
I filed a chapter 13 for a client. I got a call from one bank last week and the representative stated to me that unless the debtors plan provides for 100% payment to this bank, then can go after the co-debtor on this consumer obligation while the debtor is in bankruptcy.
I do not see anything of the sort in the code or the cases. Am I right or is there some exception that I have never heard of?
Stella
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Jim:
No difference. You are planning correctly. 1301 codebtor stay would not apply if a business debt, but auto stay would protect community property. I have used this tactic successfully. Creditor must contest the community property discharge and most do not.
d
________________________________
To: "cdcbaa@yahoogroups.com"
Sent: Friday, August 10, 2012 10:38 AM
Subject: RE: [cdcbaa] Community discharge
To all (especially Dennis M.):
Is there any difference between the community discharge in Chapter 13 and Chapter 7? A PC husband is being sued on a business debt. The PCs wife has legitimate reasons to file a Chapter 13 to cure arrearages on the home in her name. While there would be no co-debtor stay under Section 1301 since its not a consumer debt, it would appear that any effort by the creditor of the husband to enforce a judgment against CP earnings of the husband during the Chapter 13 case would violate the automatic stay and would violate the (community) discharge following the successful conclusion of the Chapter 13 case. Although the creditor may have potential 523 claims against the husband, if given notice of the wifes case they would have to timely file such a Complaint prior to the deadline in the Chapter 13 case.
Jim
James R. Selth
Certified Bankruptcy Specialist*
Weintraub & Selth, APC
11766 Wilshire Boulevard, Suite 1170
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
*Certified by State Bar of California as Certified Legal Specialist in Bankruptcy Law
The post was migrated from Yahoo.
Dear Jim,
The community discharge is a creature of 524(a)(3) and is independent of chapter. Of course, if the husband has separate property, the community discharge wouldn't shield it from collection, but community property earnings would be protected
However, if the creditor has a motion for relief from the stay granted to resurrect the state court action, and successfully prosecutes the state court action and a timely filed 523(c) action, then the wife's discharge will not protect community property earnings, regardless of the chapter under which she filed.
I don't know if this gets to the heart of your question because I suspect there are pertinent facts in your case that didn't come out in your post. Do you have something else in mind?
All the best,
Nick
Nicholas Gebelt, Ph.D., J.D.
Certified Bankruptcy Specialist
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The post was migrated from Yahoo.
To all (especially Dennis M.):
Is there any difference between the "community discharge" in Chapter 13 and Chapter 7? A PC husband is being sued on a business debt. The PC's wife has legitimate reasons to file a Chapter 13 to cure arrearages on the home in her name. While there would be no co-debtor stay under Section 1301 since it's not a consumer debt, it would appear that any effort by the creditor of the husband to enforce a judgment against CP earnings of the husband during the Chapter 13 case would violate the automatic stay and would violate the (community) discharge following the successful conclusion of the Chapter 13 case. Although the creditor may have potential 523 claims against the husband, if given notice of the wife's case they would have to timely file such a Complaint prior to the deadline in the Chapter 13 case.
Jim
James R. Selth
Certified Bankruptcy Specialist*
Weintraub & Selth, APC
11766 Wilshire Boulevard, Suite 1170
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
*Certified by State Bar of California as Certified Legal Specialist in Bankruptcy Law
The post was migrated from Yahoo.