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* What about a member who is married when the the defaulted loan is made but the members spouse didn't sign the loan documents-and then the couple moves to a community property state? * Is it proper to sue for collection only the signing party or also the nonsigning spouse? * What property can be attached to satisfy the judgment if only one of the spouses signed the loan agreement? * Should the file suit in the state the contract was entered into or in the state to where the member moved? In most jurisdictions, debts incurred outside a community property state during marriage can be enforced against the community. In most instances, the signature of one of the spouses is all that's necessary to bind the community. The most common exceptions to this general rule are contracts involving real estate, and for indemnity, guaranty, or surety. However even if the signature of one spouse is all that is required to bind the community in contract, most jurisdictions require the joining in a suit for collection of the nonsigning spouse be able to collect from community assets. Failure to join both spouses in the suit will often result in a worthless judgement because the c.u. would then be limited to attach only the separate property of the spouse who was sued. Most married couples own all of there property as community assets. If you want to collect, you need to be able to get at the community assets.
Premarital debts Debts incurred prior to marriage cannot be enforced against the separate property of the nonsigning spouse. However the c.u. is entitled to collect against that portion of the community property owned by the signing spouse.

Born of Spanish origin, community property law in the Americas evolved from the time of European colonization. Broadly, community property is a system defining marital property rights recognizing common ownership of married peoples' property. in community property states, property the parties acquire during marriage falls under the definition of this ownership system. All other property is considered separate, including property spouses own prior to marriage that has not been co-mingled, or mixed, with community assets. There are eight states which recognize a community property system of ownership: AZ, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. Central to the concept of community property is the idea of equal management and control of the married couple's assets. It's this concept of equal management and control which is critical to creditors' rights, and will ultimately determine whether c.u.s are able to collect their debts. Here are some common questions facing many c.u.s in noncommunity property states regarding debt collections. * What is the appropiate course of action to take when a member defaults on a loan before or after moving to a community property state, and then marries?
LAW OFFICES

Howard A. Chorost

A Professional Corporation

Tucson-Phoenix-Sierra Vista

ARIZONA ATTORNEY

collections, wills estates and trusts, commercial real estate, personal injury, landlord and tenant

Tucson Office
21 East Speedway Boulevard
Tucson AZ 85705
(520) 792-0011
Fax (520) 622-0942

Phoenix Office
4350 East Camelback Rd., 100-F
Phoenix AZ 85018
(602) 246-9446
Fax (602) 532-7228

Objective: To remain on the cutting edge in the field of Creditors Rights
representing financial institutions and private investors in collection matters, foreclosure, bankruptcy proceedings

Education

1987 - 1989 Southwestern University School of Law-- Los Angeles, CA

Juris Doctor
S.C.A.L.E. Program

Endorsed by the Arizona Credit Union League for championing the cause of Creditors since 1992

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