Bankruptcy and Spouses
Bankruptcy is a complex process that affects the rights
of not only the petitioner and her creditors, but also other
interested parties including spouses and ex-spouses.
Questions often arise regarding the rights of a non-filing
spouse when debt is discharged in the other spouse’s
bankruptcy proceeding. The effect of a bankruptcy on
the non-filing spouse will vary depending on the marital
property laws of the state in which the bankruptcy is
filed as well as the type of bankruptcy utilized.
Because the rights of filing and non-filing spouses varies
depending on state marital property laws, it is important
to understand the concept of community property.
Community property includes real estate, tangible assets,
and earnings of both spouses acquired during the
marriage. Community property does not include assets
acquired by either spouse by gift or inheritance and does
not include assets owned prior to the marriage. Like
community property, all debts incurred by either spouse
during the marriage are considered community debts,
thus, each spouse is equally liable for debts of the
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