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Debtor's recently deceased spouse had $99K in student debt; how does that affect exempt equity after Chapter 7 liquidati
Nick,
The husband can still claim The CCP 704 exemptions through probate. If the property was held in joint tenancy no probate is necessary as nothing subject to probate. Husband can also file a spousal property petition relating to the assets that are subject to probate. That is the summary probate proceeding. Typically student loans have life insurance attached to them so that nothing is owed after death.
Mark Jessee
Sent from my iPhone
> On Jan 7, 2015, at 4:26 PM, Nicholas Gebelt ngebelt@gebeltlaw.com [cdcbaa] wrote:
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> Dear Listmates,
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> I have an unemployed client who wants to file a Chapter 7. He has a house with about $130,000 in equity, and he can take a $75,000 equity exemption. He is behind six mortgage payments, and given his finances cannot keep the house. Therefore, he wants the trustee to liquidate it so he can get some money.
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> Heres the wrinkle: His wife died in November 2014, without a will. She had $99,000 in student loans; he did not cosign. If the wife were still alive, all community property would be fair game for the student lender to go after. Now that she is dead, I dont know how meaningful the concept of community property is.
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> How much of my clients exempt equity is in jeopardy after liquidation of the house? All? Half? None?
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> Thanks for your help.
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> All the best,
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> Nick
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> Nicholas Gebelt
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> Nicholas Gebelt, Ph.D., J.D.
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