Expert: Norma Duenas - California Bankruptcy Attorney - 3/3/2011

Question
We are in California. My wife filed Chapter 7 alone last year and it was discharged. My wife did not sign a reaffirmation agreement. Her debts included a rental property in which we are both co-signers, although the property is in her name only. The credit cards were also in her name.  Because of the financial drain the rental house payments and maintenance are causing us, she is letting the house go into foreclosure this year. After foreclosure, could the bank and the credit card companies   pursue me for both the house debt and the credit card debts?

Answer
If the debt for the rental home was a community debt then your wife's Chapter 7 discharge operated as a community discharge that protects your community assets. What this means is that the creditor from the rental property cannot seek to try to collect from your community assets as long as you remain married. This protects you from the creditor trying to collect any deficiency from community property even though you did not file bankruptcy. This also applies to the the credit card debts. Also in California if the rental property was foreclosed through a regular trustee sale and the house had only one mortgage then the mortgage company would not be able to seek a deficiency against you. From the facts you are providing it sounds like you would be protected from both the mortgage company and the credit cards collecting against from your community property.

For further information you can contact me at: http://www.socaladvocates.com/riverside-bankruptcy-attorney