Beauty and the Beast in Bankruptcy

     Once upon a time, in a faraway land, Beauty and the Beast got married in California; a community property state. Beast was a selfish, self-centered gambler who took a second mortgage on the couple's home to satisfy his addiction and lost more than $100k in Vegas one weekend. Now the couple can't pay their bills and they're considering bankruptcy.

     When one spouse wastes the assets and creates a debt that could be denied a discharge under 11 U.S.C. § 5423(a)(2), (a)(4), or (6), he/she may find protection in the discharge injunction. Listen, I don't make this stuff up. Just have a look at “The Devil Could Get a Discharge ... If He Were Married to Snow White!” by Marlene G. Weinstein. See applicable case, In re Kimmel 367 B.R. 174 (Bankr. N.D. Cal. 2007.

     What this boils down to is that as long as the couple remains married and the innocent spouse files bankruptcy on behalf of the "community," the discharge injunction of 11 U.S.C. § 524(a)(3), which protects the after-acquired community property of the Debtor from creditors, may also include a creditor of the Beastly spouse. A thorough review of Kimmel will assist your attorney in providing proper representation under these facts.

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