Legal Question in Bankruptcy in California

Bankruptcy/Spouse Wealth Protection

I am buying a new business by borrowing 70% and contributing 30% of my own money. My spouse is not a partner she has a job and has her own money.

If I fail to succeed in the business and I am force to file for bankruptcy, will the bank claim and get the money from my spouse. She is not a part of the business and some of the money she has came from the sale of our house. Rest is her saving from her salary for the last few years.

I would appreciate a reply,

Thanks


Asked on 1/06/04, 2:36 pm

2 Answers from Attorneys
Mark Markus Law Office of Mark J. Markus

Re: Bankruptcy/Spouse Wealth Protection

If the bank gets a judgment against you, they can seek to collect from any community property that you have, which includes 1/2 or your wife's income and any other community property assets she has. If the bank gets a judgment against you both (which is possible), then they can go after both of your assets (subject to any exemptions you have). California is a community debt State, which means that both spouses are liable for any debts incurred during the marriage.

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Answered on 1/06/04, 2:42 pm
Amy Ghosh Law Offices of Amy Ghosh

Re: Bankruptcy/Spouse Wealth Protection

What Mr. markus is absolute right. But you can always incorporate while you are in business...then do a corporate bankruptcy...you will be liable up to the asset of the corporation. Follow...corporate formalities anddo not comingle your personal corporate account..and asset.Take a look at my site at www.lawyers.com/amyghosh

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Answered on 1/06/04, 5:31 pm


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