Moore?Marsden (FC2640)
Posted: Mon Apr 18, 2005 6:42 pm
Here's how a colleague responded:
Correct, unless the community contribution exceeds the separate contribution, in which case a judge could find that the home is entirely a community asset with a right of recovery of the separate interest by the spouse (which finding would normally not be overturned on appeal); this could make a BIG difference given the high rate of appreciation in homes in SoCal.
Question 1: Is the right to reimbursement an interest in property ?
Absolutely. No brainer.
Question 2: If so, may a homestead be claimed under the Section 704 exemptions as to his interest ?
As long as H is residing in the home when he files, yes. All we are discussing here is the amount and its characterization as either separate or community per the above.
Question 3: If it not property, is the right to reimbursement something the Chapter 7 trustee may pursue if no divorce has happened or is anticipated ?
First of all, it is academic since the right to recover an interest in property is 541 property of the estate. If what he means is that under state law there is no right to contribution, then it would have to go through a fraudulent transfer-548 analysis.
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----- Original Message -----
To: cdcbaa@yahoogroups.com
Sent: Monday, April 18, 2005 11:52 AM
Subject: [cdcbaa] Moore?Marsden (FC2640)
Dear Group --
I know this issue has come up before, but I am not sure there was ever a clear answer. (Perhaps there isn't one.)
(Prospective) Debtor is married. He resides with his spouse in a residence owned by her before marriage. Debtor has never been on title to the property. Debtor and spouse have been married for a number of years. Post-marriage, mortgage payments have been made from their respective incomes. Refinancing has also occurred, but only in her name.
Debtor, alone, would like to file a chapter 7 case. Under the Moore/Marsden (FOC 2640) analysis the community would be entitled to a relatively small amount of reimbursement that may exceed the wildcard exemption to which he would be entitled.
Question 1: Is the right to reimbursement an interest in property ?
Question 2: If so, may a homestead be claimed under the Section 704 exemptions as to his interest ?
Question 3: If it not property, is the right to reimbursement something the Chapter 7 trustee may pursue if no divorce has happened or is anticipated ?
Thank you for your assistance.
Law Office of Eric Alan Mitnick
21515 Hawthorne Boulevard, Suite 1080
Torrance, CA 90503
(310) 792-5864; 792-5866 (fax)
MitnickLaw@aol.com
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