Asaph Abrams Attorney at law

San Diego Bankruptcy

bankruptcy attorney san diego

Will bankruptcy protect my co-debtors or co-signers?

If you file a chapter 7 bankruptcy, co-debtors and co-signers get no protection; they’re still fully on the hook. 

If you file a chapter 13 bankruptcy plan and it provides for payment on a debt, your co-debtor or cosigner will get credited for what you pay. The automatic stay that protects you, also affords them temporary protection.

If I file for bankruptcy, how will my spouse by affected?

If married, you have the choice whether to file for bankruptcy individually or jointly with your spouse.  If all the debt is in one spouse’s name, there is likely no reason for the other to file for bankruptcy protection.  If spouses have debt in both their names, they often file for bankruptcy together.  However, one should examine the nature of the spouses’ debts.  If all the debt is community debt (debt acquired after marriage), then it is not strictly necessary for both spouses to file.  A bankruptcy discharge eliminates liabilities of the filing debtor and of the community (i.e. husband and wife). Suppose Jack separately files for bankruptcy.  He lists all the joint credit cards he and wife, Liz used after they married.  When he gets his discharge, the debt collectors won’t be able to pursue Liz for payment by virtue of her marriage to Jack.  If a spouse has separate debt, meaning debt acquired before marriage, they would want to put their name on the bankruptcy petition.  Thus, if Liz still owed on credit cards from her bachelorette days, she may want to jointly file for bankruptcy with Jack. 

Additionally, one must keep in mind that the bankruptcy estate (which is subject to liquidation) consists of all community property.  In California, all acquisitions and earnings after marriage (with certain exceptions such as inheritance) belong to both spouses.   Consider Michael and Holly, recently hitched.  If Holly files separately for bankruptcy, Michael’s PT Cruiser acquired prior to marriage won’t be part of Holly’s estate.  However, the couple’s Honda Odyssey purchased post-marriage will be part of the estate even if it’s only under Michael’s name. Holly should seek legal counsel to ensure the Honda is fully exempt from liquidation. 

General Bankruptcy Questions

san diego bankruptcy attorney
San Diego bankruptcy attorney

To discuss your particular situation, please call (858) 344-0500 to schedule your free consultation.