In 2003, I took out a business loan from the bank and defaulted. The Bank obtained a judgment against me for $200,000. I am interested in filing bankruptcy since I can't pay for it and I don't have any assets. However, I'm worried about my husband. Is the judgment enforceable against my husband since CA is a community property state? In other words, does my husband have to file bankruptcy too? We were married at the time of the loan and judgment. However, the loan was only under my name for my business. Thank you for much for your help.
Unless the judgment named your husband, it wasn't granted as a community debt and he isn't technically responsible for paying for this debt. However, any assets that you may own together are vulnerable to being seized by this judgment creditor. Although you say you don't have any assets, if your spouse has property that was acquired during the marriage, it may be considered to be community property.
Get yourself to a good bankruptcy attorney in your community. Hope this perspective helps!
If the judgment was against you solely then you are liabile for the debt.
However, the creditor can look to community assets acquired during marriage to collect against.
You could file for BK individually or with your spouse. I would recommend you consult with a BK attorney for advice. I do practice BK and have an office in LA, OC, Riverside and San Bernardino.
Let me know if I can help you out.
My colleagues have answered this question fairly well in terms of community property liability. They can levy your husbands separate bank accounts and even garnish his separate wages for this debt.
Regarding BK however, if you go BK personally that will discharge the debt, you will not need to get your husband involved and he needs not go BK. Remember while individual debts can be enforced against community property, that debt remains yours and yours alone, and your
once you get your BK discharge, then that debt is discharged.
So I guess this would be good news!
You should call a BK atty.
Richard O Evanns
I am an attorney, licensed only in CA. Any opinions stated herein are based on very limited facts, and should not be used as a basis to take actions that may affect anyone's substantive legal rights. My answering this or any question creates no attorney / client relationship.
When did you default on the loan? When were you sued? When did they get the judgment? What form of business did you have? Corp? LLC? DBA? These are key issues in deciding what they can and cannot do.
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