For every sound, balanced, nuanced article on consumers and their debts, there are bunches of sloppy, inaccurate sites, often trying to make bankruptcy so frightening that you’ll buy whatever they’re selling.
But when a group of bankruptcy lawyers, trying, I’d assume, to provide useful information on bankruptcy get it so wrong, I’m perplexed.
Bankruptcy Home, which identifies itself as a group advertising site for bankruptcy lawyers, has community property absolutely wrong. At least California community property, which is all I’m licensed to deal with.
When one spouse in a community property state files bankruptcy, the site says, the debtor must include the value of one half of the community property. Wrong, wrong, wrong!
I don’t know whether these lawyers haven’t read the bankruptcy code or haven’t read the site that they pay for. Neither alternative is flattering to them.
All Community Property Comes In
Here’s what section 541 of the bankruptcy code says:
(a) The commencement of a case …creates an estate. Such estate is comprised of all the following property…
(2) All interests of the debtor and the debtor’s spouse in community property as of the commencement of the case that is—
(A) under the sole, equal, or joint management and control of the debtor; or(B) liable for an allowable claim against the debtor, or for both an allowable claim against the debtor and an allowable claim against the debtor’s spouse, to the extent that such interest is so liable.
Image courtesy of Tambako the Jaguar.