Let’s Learn About The Unique Twists And Turns In California’s Bankruptcy

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Let’s Learn About The Unique Twists And Turns In California’s Bankruptcy

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In California, bankruptcy is handled differently; I probably don’t need to explain why. The degree to which bankruptcy in California, a process governed by federal law, differs from that in other states could surprise you.

Three factors give bankruptcy in California its distinctive colour:

  • Anti-deficiency laws are included in state legislation regarding foreclosure.
  • Community property exclusions Foreclosure
  • The state of California allows non-judicial foreclosures.

This indicates that no legal process must be completed before a foreclosure sale may take place. This situation does not allow for the frequently cited “show me the note” foreclosure defense. There is no court involved in a non-judicial foreclosure. Loans used to buy a property are “non recourse” according to state law. Non-recourse loans prevent borrowers from being subjected to monetary judgments from lenders, even in the event of judicial foreclosure. Only the collateral is received by the lender.

Furthermore, when a lender utilises the power of sale in a deed of trust to carry out a non-judicial foreclosure, it forfeits its ability to pursue further debt recovery. It makes no difference whether the loan was for purchase money or a refinancing. Therefore, when a typical foreclosure is finished, the borrower is no longer liable to the creditor who foreclosed. Depending on whether they are junior lien holders, any may have legal recourse against the borrower.

If you are looking for an attorney to represent you for bankruptcy filing and guidance, you can get in touch with the renowned Recovery Law Group. To boon an appointment – https://www.recoverylawgroup.com/bankruptcy/

Exemptions

Debtors in California have an option between a set of bankruptcy-only exemptions contained in CCP 703.140 and the state law exemptions found in Code of Civil Procedure 704, which were present in the federal statute at the time the California legislation was created. When a homeowner has equity in their principal house, they often choose for the 704 state law exemptions with a sizable homestead exemption.

The CCP 703 exemptions, with its “wild-card” or “grub stake” exemption for equity in any sort of property, are preferred by renters or those who have no equity in their residences. Every three years, the amounts for California exemptions are modified.

Public Property

In California, which is a community property state, unless the spouses agree differently, all property obtained by a married pair during the marriage belongs to both of them equally. The debts incurred by either spouse during the marriage and before to the marriage are the responsibility of the common property, not necessarily the other spouse individually.

The whole common estate is created even if only one couple declares bankruptcy. If not exempt, the estate’s assets might be used to utilise the bankruptcy to pay off both spouses’ shared obligations. Could I declare bankruptcy on my own?

Discharge of Community Property

In places with community property laws, such as California, the participation of both half of the community comes with a cost for debtors. When just one spouse files for bankruptcy, there is a trade-off for debtors in community property jurisdictions like California regarding the inclusion of both halves of the community property in the bankruptcy estate.

Even if only one spouse filed, if the filing spouse receives a discharge, any common property of the marriage obtained after the bankruptcy is safeguarded by the discharge. The claims that are discharged in the case do not apply to the property that was excluded or given to the debtor at the conclusion of the action.


    2022-10-06T09:31:10+00:00