Question:

Ex-wife is filing chapter 7?

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We live in california and we in the process of getting a divorce. The mortgage loan is under my name and and she signed a quit deed to let me have it since we only about 20-30K in equity. After the divorce - she is planning to file chapter 7 with 90K in credit card debt. Can the court come after me or the house ?

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  1. If you are jointly liable for the credit card debt, creditors can come after you and your non-exempt assets.  With the minimal equity you have, you can protect the house with a homestead declaration.  


  2. If those cards are in your name, then yes. If not, then its her debt.

  3. You need to sit down with the bankruptcy attorney before you proceed with this, BEFORE any deeds are signed!  Do it tomorrow!

    You are facing many pitfalls, not the least of which is the fact that CA is a community property state.  Half of the credit card debt from the marital estate is YOURS as far as the creditors are concerned.  And while secured debts are generally not included in a BK, you need the guidance of an experienced attorney BEFORE anyone signs ANYTHING.

  4. One can not release an asset to anyone while planning to go into bankruptcy.  In particular, giving away any asset to some related person to prevent having it seen as an asset would be seen as unfair treatment of the creditors.

    However, creditors may choose to ignore this when a high priority claim such as a mortgage is covering most of the value of the asset. But they would have the right to have any 'gifting' of her assets reversed.

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