Bankruptcy and Community Property in Arizona

Bankruptcy and Community Property in Arizona2019-04-16T03:35:03-07:00

Many of our clients are married couples who incurred large amount of joint debts together over the course of their marriage. However, not all of them end up filing bankruptcy jointly. Indeed, you are allowed to file a bankruptcy petition individually, without involving your spouse. The advantages of doing so may include:

1) An individual filing may help to avoid a credit score impact on your non-filing spouse.

2) Arizona is one of the nine states adopting community property laws. Therefore, once you are successfully granted a discharge in bankruptcy, it will not just apply to your individual debts, but also the community debts incurred by both of you during the course of marriage.

3) Further, in Arizona, the bankruptcy estate would include not only your separate property, but also the community property (properties owned by both you and your non-filing spouse). Hence, once you file the bankruptcy petition, the Bankruptcy Automatic Stay Protection under 11 U.S.C. 362 would apply to stop debt collectors from collecting debts against the community property, even though your spouse has not done anything under the Bankruptcy Code.

4) The non-filing spouse’s separate properties should not be treated as part of the estate so, absent any other considerations such as a fraudulent transfer, the Bankruptcy Trustee cannot reach those properties for bankruptcy distribution purposes.

Note: For readers of this article, who are now living in or used to live in other U.S. states which adopt common law property laws (i.e. equitable distribution property laws), be aware that the laws will vary and so you should consult an attorney in your area.

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  • 1. Bankruptcy is our sole area of practice. Attorney Wright has over 10 years of experience in the field of bankruptcy and has helped over 1000 people successfully file.
  • 2. Attorney Wright has an accounting background that is useful in analyzing complex financial documents. Prior to law school he obtained a degree in accounting from the University of Wisconsin School of Business. He exercised his strong numerical aptitude in the field of accounting, including several years with The Kohler Co., before ultimately deciding to pursue a law degree.
  • 3. New clients meet with an attorney during their first visit. We understand your time is valuable. It is important your questions are answered quickly and accurately so you can take appropriate steps to secure a better financial future and eliminate fear and stress.
  • 4. In business, referrals are the highest form of professional compliment. We frequently receive referrals from other lawyers and previous clients.
  • 5. Our firm is small which enables us to focus on quality over quantity. We don’t have billboards on the I-10 or banners affixed to public transportation. Our approach is a bit more understated. We care about people and doing things right and it shows in our low employee turnover and positive reviews.
  • 6. Perhaps the most important consideration is the cost of filing bankruptcy. We continuously assess our fees to ensure we offer fair and competitive pricing. We want to offer you a deal without sacrificing the quality of your experience.
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