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Community Property • Debts and Obligations
CPROP#054
Legal Definition
Creditors' rights follow management rights. Thus, a creditor may reach any property over which a debtor has the legal right of management and control.
Plain English Explanation
Creditors can reach any property that a spouse has the legal right to manage or control.
Hypothetical
Hypo 1: Bob buys a luxury car using a loan but fails to make the payments. The car is considered community property, as he bought it using a loan while married to Amy. Result: The creditor can claim the car to settle Bob's debt, even though it's community property, because Bob has legal control over it.
Hypo 2: Amy inherits a sum of money from her aunt, which she keeps in a separate account. Bob, her husband, racks up gambling debts. Result: The creditor cannot claim Amy's inherited money because it's her separate property, and Bob has no legal control over it.
Hypo 3: Bob and Amy jointly purchase a vacation home. Later, Bob incurs a large business debt. Result: The creditor can place a claim on the vacation home, as it is community property and under Bob's management.
Hypo 2: Amy inherits a sum of money from her aunt, which she keeps in a separate account. Bob, her husband, racks up gambling debts. Result: The creditor cannot claim Amy's inherited money because it's her separate property, and Bob has no legal control over it.
Hypo 3: Bob and Amy jointly purchase a vacation home. Later, Bob incurs a large business debt. Result: The creditor can place a claim on the vacation home, as it is community property and under Bob's management.
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