As you may or may not know, California is a Community Property state. As a result, people often assume that if one spouse files bankruptcy that they both must declare bankruptcy. While this is true in some cases, it’s not true in every case.
Situations in which just one spouse can declare bankruptcy
The situations in which one spouse can declare bankruptcy without the other needing to do so are pretty specific. If the debt incurred is separate property then the debtor spouse is likely to be able to file separately without their spouse having to do so as well. This includes debt that’s been acquired before the marriage or debt that’s excluded from community property.
Married couples should still take extra precautions
Remember that married couples need to contact legal representation before they decide that only one spouse can file. Why? Because in some cases, assets can actually change from being separate to being community property. Are you confused about how you should file? Contact The Law Offices of Paul Y. Lee today for a free consultation.
Other misconceptions about bankruptcy in California
While the issue of whether both spouses must declare bankruptcy is often confusing and surprising for people, it’s not the only misconception about California bankruptcy. For example, some people actually believe that they can lose their job if they declare bankruptcy. The truth is that there’s a law that’s very clear: employers can’t discriminate against either employees or people apply to jobs just because they’re in bankruptcy or have incurred debts prior to filling for bankruptcy.
Another misconception we’ve heard time and time again is that people believe that they will lose their home and car if they declare bankruptcy. The truth is that The Law Offices of Paul Y. Lee can almost always help you keep your home and / or cars.
The key is to stay current on your car and / or home loans. If you do, then lenders won’t foreclose or repossess. Once you’ve paid off the loans, you’ll owe them free and clear. If you actually have equity in your home then we can protect as much as $175,000 in equity, depending on your age, health, and the size of your household. We’re also able to protect up to $25,000 in equity in other personal property, such as cars. For more information, check out our handy California exemption chart.
Get help with your bankruptcy today
Are you considering filing bankruptcy? Do you have questions about the best way to move forward? You could contact any debt relief company or attorney but why wouldn’t you contact The Law Offices of Paul Y. Lee? We specialize in California bankruptcy and are here to walk you through every step of the process. Deciding to declare bankruptcy is rarely an easy decision but it’s often the right one. Call The Law Offices of Paul Y. Lee today at 951-755-1000 for your free consultation.
