Legal Question in Bankruptcy in California

Is This a Viable Solution
I have a court settlement that I am paying. Part of that settlement states that if I fall 60 days behind on a payment the amount due increases substantially along with the highest interest allowed by the courts. This dispute was settled out of court and I settled primarily because I was unable to leave my new business and accrue the costs of flying to another state to fight it. The lesser sum of the settlement (I told myself) was worth not having to go into court. The larger sum is a different story. A lawyer suggested I file Bankruptcy to avoid going to that next level. I don't have anything in my name, it's in my husband's and the litigation is only against me. We are meeting our financial obligations, we have a small savings, the business is growing and may prove to be somewhat profitable. Our debt is minimal, mine is minute. We are renting and would like to purchase a home in the next year or two. Can you offer any insight to this situation, possibly you see some advantage or disadvantage that I may be missing. Thank You

Asked on 5/03/03, 11:50 am

2 Answers from Attorneys

Robert Mccoy Law Office Of Robert McCoy

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Re: Is This a Viable Solution

The answer to your question depends on whether the property in your husband's name is community property or not. You can only get a complete discharge without having to pay anything only if you do not have too much community property. It is presumed that everything you buy after mariage is Community Property regardless of whose name it is in. If the property in your husband's name is Community Property you may still qualify for an exemption (either about $17,000 or $75,000 equity in your home). To answer your question I would need to know what the value is of all the propety owned by you or your husband. If you have too much community property there are two things you can still do, 1) do a divorce or separation and give all assets to your husband in the decree (note that this is not a sure thing and is currently pending before the California Supreme Court) or 2) do a Chapter 13 bankruptcy where you will accrue no interest and may have to pay back only a percentage of the debt.

Answered on 5/03/03, 12:22 pm

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