Home > Research Legal Advice > Bankruptcy / Debt > Can wife transfer separate property during husband's bankruptcy? My hus...
Asked 12 months ago - Los Angeles, CA
FlagI own a separate property house. My parents transferred it to me. It's my understanding though that because it was given to me during the marriage it could potentially be brought into his bankruptcy estate b/c I have to disclose all my income and assets even though I'm not filing. If I'm not the person filing can I transfer that property and also can I freely spend my money as I please while he's going through bankruptcy? He doesn't have a lawyer. Thanks.
you said "my money"? Community money?
you didn't say how house was titled and whether it was a gift or other reason for holding title such as a trust (parents still living / living in house?
California as a community property state offers some flexibility in terms of the community where one spouse declares bankruptcy.
You need to SERIOUSLY talk to a bankruptcy attorney. Your spending can affect his bankruptcy, Your house may need special mention/explanation in his bankruptcy. If he discloses less than 100 % he could get into trouble for fraud. If the marital community assets are not fully explained and differentiated from separate property assets it will be trouble down the line.
Its folly to do this without a bankruptcy lawyer.
The answers previously provided are quite accurate and it would be advisable for you to pay attention to what's been stated. A Chapter 13 bankruptcy is not exactly a "simple matter" and easy to navigate on one's own... add to it the issues you have highlighted concerning "separate property", "community property" and the transfer of assets, and you/your husband has the ingredients for a perfect storm.
Hiring a bankruptcy attorney to help with a Chapter 13 case may not be as painful as you may think: oftentimes, a portion of the total attorney fees may be paid through the bankruptcy cases itself via the Chapter 13 plan. Of course, this would depend on multiple factors and a complete, thorough analysis of your husband's situation.
What is essential to take away from the Avvo.com community's questions and answers is this: qualified, experienced attorneys are available to help you but you before things get too complicated to handle yourself - you must know when to seek assistance and enlist the experience and reputation of a professional.
To answer your question: truly separate property (depending how it was transferred to you, how it is/was titled, and whether any funds have been commingled to support that asset) may not be a big problem. However, how your husband's bankruptcy case accounts for the community property assets vs. your separate property assets is of utmost importance.
For more information visit: www.salanicklaw.com
Best of luck!
I would suggest he get an attorney, especially for a Chapter 13. These cases can get complicated, and here you have property which you want to be treated as separate. The Trustee will try and get the property to be treated as community, so an attorney would be extremely helpful. If the property is treated as separate, you could transfer it. But I would not do anything now until you get some indication from the Chapter 13 Trustee as to how the property will be treated.
Just to add that California community property law is somehow complicated and on top of that you are adding the bankruptcy complication of a chapter 13 that is going to last most likely 60 months. To add even more complication, your husband is filing alone his BK while you are living together in a community property state.
In California, your separate debts may be collected from your husband, is he going to list those debts in his BK?
Your income is community property income and need to be listed as such in some schedules but here is an adjustment for your separate expenses for the means test calculation, it may make a difference in his filing .
Any change in your income need to be reported and may trigger a change in the plan even if it is already approved.
Are you going to file your taxes jointly or separately? There is a three year attachment of your husband income tax refund if the plan provides for less that 100% to general unsecured creditors.
Your question raises more questions that only a qualified BK attorney may answer.
I recommend that you look for one in the AVVO website in the bankruptcy attorneys section and schedule a free consultation and you will be happy that you did. You may find the answers to your specific dilemma.
Good luck.
Don't speak legalese? We define thousands of terms in plain English.
Browse our legal dictionary
