What is "Community Property ?"

There are nine (9) community property states in the United States, of which California is one.  Community Property is any property acquired or improved during a marriage.  It does not include property received by gift, inheritance, or devise received outside of the marital unit. 

Before filing a bankruptcy case, please seek assistance of a competent attorney to determine what property you have, and how it may be protected within the appropriate exemption scheme.  


Hi Everyone, Dan Wiedecker, staff attorney for Debt Relief Legal Clinic. 

Let's do a quick discussion on a term or phrase that is reasonably simple to discuss, but in application, can oftentimes be quite complicated - that is community property. 

Community Property is a law that basically states any property acquired during marriage, as long it's not by inheritance or some other gift within the family from an outside source, anything you acquire during marriage is "community."

In the state of California, that means the property at marital dissolution is divided 50/50 unless there is some form of agreement otherwise. 

There are 9 community property states in the United States. They're not all along the West Coast. It's easy to find out - you can simply do a Google search or go on Nolo.com and you can find out what the community property states are.

As it relates to bankruptcy, the topic can become complicated because, how long has the marriage been in place? Is it a second or third marriage? Is there a prenuptial agreement? Or any of those kinds of things. 

When one files a bankruptcy case, it's presumed that all community property is available for liquidation of any Chapter 7 case or in a Chapter 13 bankruptcy liquidation analysis. 

It's really important to get the advice of an attorney, especially if you are in a community property state, to figure out what your "exposure" will be.

Because the last thing you want to do is file a Chapter 7 case and find out that everything is not 50/50, and then the spouse that is not part of your bankruptcy case is mad as a kicked horner's nest because he/she is going to lose something that was not otherwise disclosed or know. 

So, community property. Easy concept to talk about, but the application is much more complicated. Please seek competent advice before you file a bankruptcy case.