Author Topic: Which wife is on the hook due to community property?  (Read 1599 times)

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beaktl

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Which wife is on the hook due to community property?
« on: September 22, 2016 05:51:12 PM »
Not sure where else to post this but want to make sure I understand how this would work....

While I was married to wife A we started a business (s corp), some vendors opened a line of credit with just me as a personal guarantor.  We ended up getting divorced but by then business had ceased and there was still a pretty large balance with one particular vendor.  The divorce decree awards the corporation, all it's assets and liabilities to me.

A bit of time goes by, I've remarried to wife B and that vendor ends up suing me and getting a judgment.   

I'm in Texas and will probably have to file bankruptcy to get out of this.

My question is which wife is ultimately on the hook due to community property?  I can see how it would be wife A since the original debt was incurred while we were married.  But I can also see how it's wife B because of the date of the judgment.  Or with my luck it will be both :(

It matters because the way I understand it even if I bankrupt out of it and then they go after wife A, she can use the divorce decree to turn around and still end up collecting from me if they get anything from her.

Flyingifr

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Re: Which wife is on the hook due to community property?
« Reply #1 on: September 22, 2016 06:29:58 PM »
Not sure where else to post this but want to make sure I understand how this would work....

While I was married to wife A we started a business (s corp), some vendors opened a line of credit with just me as a personal guarantor.  We ended up getting divorced but by then business had ceased and there was still a pretty large balance with one particular vendor.  The divorce decree awards the corporation, all it's assets and liabilities to me.

A bit of time goes by, I've remarried to wife B and that vendor ends up suing me and getting a judgment.   

I'm in Texas and will probably have to file bankruptcy to get out of this.

My question is which wife is ultimately on the hook due to community property?  I can see how it would be wife A since the original debt was incurred while we were married.  But I can also see how it's wife B because of the date of the judgment.  Or with my luck it will be both :(

It matters because the way I understand it even if I bankrupt out of it and then they go after wife A, she can use the divorce decree to turn around and still end up collecting from me if they get anything from her.

The answer to this question would depend on the answer to my question:

Was the business in operation during the time of your marriage to spouse B?

If yes, then a good attorney could make the argument that BOTH spouses are part of the two Marital Communities that the business benefited. If the business ceased operations before the marriage to B, then A would be the only spouse that benefited from the business, making it part of her marital community property.

Where does this debt stand as far as the Texas Statute of Limitations is concerned?
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Bruno the JDB Killer

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Re: Which wife is on the hook due to community property?
« Reply #2 on: September 22, 2016 07:39:50 PM »
I think it would be the wife you were married to when you incurred the debt.  Lenders could care less about divorce decrees, they are not a party to it; that's between you and wifey.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

moondog

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Re: Which wife is on the hook due to community property?
« Reply #3 on: September 24, 2016 04:22:55 PM »
+1 what bruno said

beaktl

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Re: Which wife is on the hook due to community property?
« Reply #4 on: September 24, 2016 04:51:43 PM »
Thanks everybody, sounds like more dealing with the ex :(

Flyingifr, Technically the business still exists but can't really operate as it used to.  I was a gun dealer and my FFL (Federal Firearm License) expired the day before I married my second wife.  I cleared out a few things afterwards but nothing significant.

CleaningUp

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Re: Which wife is on the hook due to community property?
« Reply #5 on: September 24, 2016 08:50:06 PM »

Thanks everybody, sounds like more dealing with the ex :(

Flyingifr, Technically the business still exists but can't really operate as it used to.  I was a gun dealer and my FFL (Federal Firearm License) expired the day before I married my second wife.  I cleared out a few things afterwards but nothing significant.



That you are no longer licensed only means that you can no longer sell firearms.


Flyingifr

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Re: Which wife is on the hook due to community property?
« Reply #6 on: September 25, 2016 06:51:10 PM »

That you are no longer licensed only means that you can no longer sell firearms.

And the timing of that expiration takes the second wife off the hook, as the Marital Community of which she is a part received no benefit of the gun business.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)

beaktl

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Re: Which wife is on the hook due to community property?
« Reply #7 on: September 25, 2016 08:42:23 PM »

That you are no longer licensed only means that you can no longer sell firearms.



Technically, according to the ATF, it means that I can no longer "engage in the business of buying and selling firearms"  I can do anything an individual person can.  I can still sell of remaining inventory, I can even buy new firearms for corporate use and I can even sell those off later afterwards.  I just can't pursue that as an business activity.

CleaningUp

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Re: Which wife is on the hook due to community property?
« Reply #8 on: September 26, 2016 03:51:16 PM »
With your licensed revoked, I would not advise doing that...buying and selling seems suspiciously like "business" after all.

And if you are not concerned with either buying or selling firearms, why did you even raise the issue

Seems to me that you aren't giving much serious thought to the position that you have gotten yourself into.

beaktl

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Re: Which wife is on the hook due to community property?
« Reply #9 on: September 26, 2016 04:30:11 PM »
With your licensed revoked, I would not advise doing that...buying and selling seems suspiciously like "business" after all.

And if you are not concerned with either buying or selling firearms, why did you even raise the issue

Seems to me that you aren't giving much serious thought to the position that you have gotten yourself into.


Ok, first of all I let my FFL expire, it did NOT get revoked.... there's a huge difference and it takes a lot to get a FFL revoked.

The issue was actually raised by you BTW.  I answered Flyingifr's question about timing, and included something that can clearly show when I was no longer able to continue conducting business (expiration date of my FFL).  Then you chimed in about inability to sell at all i.e. " can no longer sell firearms"  which was inaccurate which I corrected.  There's enough bad information floating around about gun laws as there is, didn't want more spreading so I corrected it.

How about I handle the gun laws and you guys handle the rest?  Let's stick to what we really know.

CleaningUp

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Re: Which wife is on the hook due to community property?
« Reply #10 on: September 26, 2016 04:36:06 PM »
It's a legitimate issue...Which is one of the things that you are having trouble understanding.

It's also somewhat irrelevant as to whether your license to sell was revoked or just not renewed.  You no longer legitimately have the right to sell the LLC's assets.

You wouldn't have this problem as a sole proprietorship, but then again you wouldn't have the protections that the LLC provided you.

You made the trade.  Time to start understanding what the consequences of that trade might be.  You can't have it both ways.




beaktl

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Re: Which wife is on the hook due to community property?
« Reply #11 on: September 26, 2016 05:21:09 PM »
It's a legitimate issue...Which is one of the things that you are having trouble understanding.

It's also somewhat irrelevant as to whether your license to sell was revoked or just not renewed.  You no longer legitimately have the right to sell the LLC's assets.

You wouldn't have this problem as a sole proprietorship, but then again you wouldn't have the protections that the LLC provided you.

You made the trade.  Time to start understanding what the consequences of that trade might be.  You can't have it both ways.





What exactly is keeping me from legitimately selling the corporation's assets?

The corporation (not an LLC btw, don't know where you got that from) is active and in good standing according to the state, I am a corporate officer.  How in the world would all the other millions of corporations without an FFL conduct business?

Perhaps you aren't understanding what a FFL is, maybe you're getting it confused with a corporate charter.  A FFL is a Federal Firearms License... only needed if you intend to "engage in the business of buying and selling firearms"  So if you want to be a gun dealer, you need one.  If you are a corporation and want to buy guns to arm your staff, you don't need one.  If you're going to sell fried chicken you don't need one either but you can still buy and sell fryers for your corporation. 

A revoked FFL always means misconduct.  So stating my FFL was revoked was like accusing me of misconduct.

CleaningUp

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Re: Which wife is on the hook due to community property?
« Reply #12 on: September 26, 2016 05:34:11 PM »
No, I am not confusing a corporation and a license.

Your licence, however it it is no longer in effect is...well...er...no longer in effect.  You are not longer entitled to legally transfer firearms that belong to the corporation.

Corporate protections also carry with them certain constraints on the ability to function...And this is the situation that you find yourself in.  You are no longer able to transfer the firearms out of corporate ownership without having to go through a LICENSED third party.

By incorporating, you forewent the ability of free, and paperless transfers between the personal and the business that a sole prop situation allows.


beaktl

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Re: Which wife is on the hook due to community property?
« Reply #13 on: September 26, 2016 05:51:01 PM »
Well maybe you're in a state that has tighter laws, but I'm in Texas and there is no requirement for private, in state transfers to go through licensees. 

Other than that you're just plain wrong. 

So unless you can cite a credible reference or send me a copy of your ATF credentials I'm done arguing this with you, I did enough arguing gun laws with uniformed customers at the hundreds of gun shows I sold at.

CleaningUp

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Re: Which wife is on the hook due to community property?
« Reply #14 on: September 26, 2016 09:02:45 PM »
Ah...getting your goat, eh.

You're the one with the problem, not me.