Legal Question in Credit and Debt Law in California
I am possibly going to be going to prison for 2-5 years for embezzlement. Should my husband and I divorce so he is not responsible for any of my debt when I am gone? We are also afraid of losing our home to the victim. Should we divorce and I quitclaim deed the house to him to protect it?
2 Answers from Attorneys
Even if that would have worked, which is unlikely, it would have had to be done BEFORE you took the money. Since you did the crime while married, community assets can be reached for restitution and transferring them after the fact just means the victim will have to trace them to get them. It won't stop anything, and opens you and your husband up to fraudulent conveyance liability.
It's probably too late for divorce to be an effective solution, if it ever were. Have you already been convicted? Unless you husband was also involved in the criminal act or conspiracy, he is not responsible for your acts. If the money you took was used to pay any community debts or purchase community assets, the community owes the debt. Unfortunately, the type of debt incurred here would not be dischargeable in bankruptcy.
Your husband should file a homestead claim on the house. Depending on the amount of equity in the property, he will be able to claim at $50,000 equity as his free of creditors.
Your husband should schedule a consultation with a local consumer law/bankruptcy attorney to determine what his rights and protections are as a result of your actions.