Legal Question in Bankruptcy in California

Re: Chapter 7 Bankruptcy

They cannot come after you as long as you are married. Chapter 7 is not being eliminated.

Re: Chapter 7 Bankruptcy

Thanks for your posting. Although the Senate passed a bill limiting who will qualify for Chapter 7 bankruptcy, (or who will be converted to a Chapter 13 if not qualified for Chapter 7), it has not been signed by the president, and thus is not yet law.

A debt incurred during marriage is community property. The current line of cases holds that if one party declares bankruptcy, then their 1/2 community property interest is discharged, and creditors cannot go after the person who filed.

The other party to the marriage, however, still has a 1/2 interest in the debt, and a creditor may go after the spouse for 50% of the entire amount.

Thanks, and feel free to email or call me at 714-568-1560 if you have further questions.

Re: Chapter 7 Bankruptcy

There is some truth about Ch 7 being difficult to file.

Credit card debt is unsecured debt so over the years credit card companies would lose money when individuals filed for Ch7. As a result of this prejudice, they began lobbying for reform to make Ch7 filing much more difficult.

Although the law is not yet in effect, the consensus is that if it is passed the old law will remain effective for 180 days. Therefore, if the law takes effect on 1/1/02, you can still file for Ch7, under the presently lenient rules, until March 2002.

As for the marital debt on the credit card, keep in mind that CA is a community prop state so everyhing purchased during marriage is presumed to be community.

All community prop you and your spouse own is considered part of the bankruptcy estate, even if you dont file for bankruptcy. Therefore, the debt will be discharged.

Having good credit is so essential and I can understand why you would be concerned about the consequence. Therefore, it is important that Bankruptcy filings are done properly so that no one's credit is compromised.

I hope that the information has been helpful and that some of your questions have been answered. If you would like to reach me you can visit my firm's website at www.dba-law.com or call on me at (213) 384-2220 and ask for Katch.

Thank you