Arizona Collection Law and
Filing the Lawsuit
The Underlying Remedies: Replevin,
Attachment and Non-Wage Garnishment
Enforcing the Judgment
Default Servicing or
Services to Financial Institutions
Folks & O’Connor, PLLC (“F&O”) conducts
a multidisciplinary practice of law throughout Arizona. The firm’s primary
client base consists of many of the banks and financial institutions located in
the region. F&O lawyers have significant experience representing such clients
concerning both complex commercial and consumer legal matters. In particular,
the lawyers of the firm have expertise in all substantive areas related to
collection, creditors’ rights, bankruptcy, foreclosure and eviction litigation.
Although F&O often serves as legal
counsel to major banks and financial institutions in high dollar and complex
transactions and cases, its loan workout, bankruptcy, collection and foreclosure
lawyers have significant experience with consumer and small business cases and
understand their clients’ conflicting need in such matters to both aggressively
prosecute claims and minimize legal fees to be able to maximize their
The firm has seasoned bankruptcy
attorneys with experience in commercial and consumer cases. In particular, they
have years of experience representing banks and other financial institutions
with respect to: (i) all aspects of prosecuting their rights as secured and
unsecured creditors in Chapter 7, 11 and 13 bankruptcy proceedings; and (ii)
prosecuting their rights when their claims concern liens secured by all types of
real and personal property.
F&O lawyers also have many years of
experience representing banks concerning commercial and consumer foreclosure,
loss mitigation, default servicing and eviction cases. The firm is one of the
leading law firms that performs such services in Arizona. The firm represents
major banks in every county of Arizona to: (i) conduct non-judicial
trustee’s foreclosure sales; (ii) prosecute judicial foreclosures; (iii) monitor
senior lien foreclosure sales and bid at such sales to protect our clients’
junior lien positions; (iv) apply for excess foreclosure sale proceeds; (v)
document deeds-in-lieu of foreclosure and loan forbearance and modification
agreements; (vi) complete UCC sales of personal property; and (vii) prosecute
I. FILING THE LAWSUIT.
is the procedure and relevant time frames in connection with obtaining judgment
in Arizona to collect a debt.
A. Filing the Lawsuit
1. The Demand Letter. A
demand letter is not statutorily required. The bank, however, must
fulfill any contractual notice requirements included in the loan
documents. Although it is not necessary, it is best to have a demand
letter attached as an exhibit to the Complaint. Therefore, if the bank
has not sent a demand letter to the debtors, we recommend that we either
prepare one or that you send one out. Notice of default and acceleration
is not required by statute, but it is a good practice to send out a
demand letter to reinstate the terms of the loan documents and to notify
the debtors that the terms of the loan documents will be strictly
2. The Loan Documents. It
is also very important to have a copy of the contract attached as an
exhibit to the Complaint. We also like to have the Confirmed Loan Terms
and/or the Additional Note Terms and any documents that: (i) reference
the applicable interest rate; (ii) define an event of default; and (iii)
provide for recovery of attorneys’ fees and costs. When it comes time to
file a motion for default judgment, we must be able to direct the court
to the contract provisions that contain the interest rate and that allow
for attorneys’ fees and costs. If the bank does not have any documents
evidencing the interest rate, we can apply the statutory rate of 10%.
3. Filing the Complaint,
Service and Motions for Alternative Service. Once the Complaint is
filed, it usually takes a week or so to serve. If the defendant is
avoiding service, we file a motion for authority to use alternative
service. It generally takes two weeks to obtain the order authorizing
such service. Alternative service consists of posting the complaint,
summons and order authorizing alternative service and mailing theses
documents by regular and certified mail. Service is complete once
posting and mailing are completed.
4. Skip Tracing and Service
by Publication. When the addresses to serve the debtors are not
valid and the bank does not have any additional addresses to attempt
service, we recommend requesting a skip trace. We have an investigator
who charges $150.00 and is approximately 95% successful.
Attempting to locate a debtor by
a skip trace is important when deciding whether to serve a debtor by
publication. Serving a debtor by publication should be used as a last
resort and should only be used once all efforts to locate a debtor are
exhausted. To serve a debtor by publication, the creditor must publish
the summons in a publication in the county where the action is pending
once a week for four (4) successive weeks. Service is complete thirty
(30) days after the first date of publication. Service in this manner
can be costly.
When a debtor is served by
publication, and the case proceeds to default judgment, a hearing is
required prior to entry of judgment. The hearing requires the creditor
to explain to the court why service by publication was used to serve the
debtor with the lawsuit. As long as the creditor has used all means
available to locate the debtor, the court will sign the default
B. The Answer
is obtained, the defendant has 20 days to file an answer or other responsive
pleading. Defendants served outside of Arizona have 30 days to file an
answer or other responsive pleading.
C. Where No Answer or Other
Responsive Pleading is Filed
1. The Application for
Entry of Default. Once the applicable time period has passed and an
answer or other responsive pleading is not received, we file an
application for entry of default. The Superior Courts in Maricopa
County, Pima County and Yavapai County also require a supporting
affidavit. After the application for entry of default is filed, the
debtor has 10 business days to file an answer or other responsive
2. The Motion for Default
Judgment. Once the applicable time period has passed following the
filing of an application for entry of default and an answer or other
responsive pleading is not received, we file a motion for default
a. Maricopa County requires
submission of a default judgment packet that contains the following:
ii. Affidavit of
iii. Verified Statement
iv. Form of Default
v. Sum Certain
vi. Copies of
certificates of service; and
vii. Copies of the
contract with the interest and attorneys’ fees provisions
b. The other county courts
simply require the first four pleadings.
c. Currently, the
Commissioners in Maricopa County are signing default judgments in
30-60 days. In other counties, it may take 30-60 days to obtain a
signed default judgment.
D. When An Answer is Filed
In most cases, when an answer is filed, the answer admits execution of the
loan documents at issue and on many occasions, the default on the loan. In
this case, we have a basis to file a motion for summary judgment that
asserts there are no disputed material facts and the bank deserves judgment
as a matter of law.
1. The 26.1 Disclosure
Statement. Once an answer is filed, the Arizona Rules of Civil
Procedure require that the parties exchange Rule 26.1 Disclosure
Statements within 40 days of filing the answer. These disclosure
statements are not filed with the court. The Disclosure Statements must
disclose the following:
a. Factual Basis of the
b. Legal Basis of the
d. Other Persons with Knowledge
e. Persons Who Have Given
f. Expert Witnesses
g. Computation of Damages
h. Tangible Exhibits and
i. Other Documents Known to
2. Relevant Time Frames for
the Motion for Summary Judgment. Once a motion for summary
judgment is filed, the opposing party has 30 days to file a response. If
the motion for summary judgment is sent by mail, an additional 5 days is
added to the response time. Thereafter, the moving party has 15 days to
file a reply. If the response is sent to the moving party by mail, the
moving party has an additional 5 days to file its reply.
If the opposing party fails to
file a response to the motion for summary judgment, we file a motion for
summary disposition. This motion advises the court that a timely
response has not been filed and that the court should grant the motion
for summary judgment. It generally takes the court 30 days or more to
sign an order granting the motion for summary judgment. At this point,
the bank only has the order granting the motion for summary judgment,
but not the signed judgment.
3. Motion for Attorneys’ Fees
and Costs. Once the motion for summary judgment is
granted, we must submit a motion for attorneys’ fees and costs along
with a supporting affidavit, verified statement of costs and a form of
judgment. It can take the court 30-60 days to sign the judgment.
II. PRE-JUDGMENT REMEDIES
There are certain collection remedies
that may be used by a party seeking to collect a debt before it obtains
judgment. These pre-judgment remedies are limited to: (i) attachment; (ii)
replevin and (iii) non-wage garnishments. Under the Arizona Revised Statutes,
such remedies are called “provisional remedies.”
A. General Requirements
Before a party
seeking to collect a debt may use a provisional remedy, it must determine
whether it will be able to satisfy certain requirements.
1. Compliance with
Provisional Remedy Statute and Underlying Remedy Statute.
If a party would like to use a
provisional remedy to collect a debt, it must comply with the statute governing
provisional remedies (A.R.S. § 12-2401). In addition, the party must comply with
the requirements of the underlying remedy statute, i.e., the statute that governs
the replevin procedure.
2. Bond. For each provisional remedy, a bond is
required. The underlying remedy statute governs the amount and conditions of the
3. Provisional Remedy With or Without Notice.
Whether to use a provisional remedy with
or without notice depends on the circumstances of each case.
a. Without Notice. A provisional remedy may be issued
without notice to the debtor under very specific circumstances. It may be used where the debtor:
i. Is about to remove permanently from
the state and has refused to secure the debt;
ii. Has secreted property for the
purpose of defrauding creditors;
iii. Has disposed of property, in whole
or in part, with intent to defraud creditors; or
iv. Is about to dispose of property with
intent to defraud creditors.
A provisional remedy without notice may
also be used where:
i. the party seeking to use the
provisional remedy is an owner, lessor or otherwise entitled to possession of
the property claimed as long as the party satisfies the requirements for a
replevin (this is applicable in situations where the party seeking to use the
provisional remedy is a secured creditor); or
ii. the property subject to the
provisional remedy is the subject of an underlying dispute and is located within
b. With Notice.
A provisional remedy may be issued with
notice as long as certain requirements are satisfied. The requirements are:
i. All statutory requirements for the
issuance of the provisional remedy have been met;
ii. An application and notice for
issuance of any provisional remedy has been filed with the clerk and a copy of
the notice and application have been served on the debtor; and
iii. The debtor has been afforded an
opportunity for a hearing or a hearing has been held.
1. Provisional Remedy Without
a. File an application and affidavit
establishing with specificity:
i. Sufficient facts supporting the
ii. One of the requirements for issuance
of a provisional remedy without notice is satisfied; and
iii. The party seeking the provisional
remedy will file such other pleadings and/or affidavits necessary for the
issuance of the particular provisional remedy sought.
b. Obtain the order from the issuing
court authorizing the particular remedy sought. It is important to have the
order signed quickly. Thereafter, the attorney generally will take the
application and related pleadings to the court himself, get them filed, and
present them to the presiding judge in person.
c. File the appropriate bond.
2. Provisional Remedy With
a. File Application and Notice with the
b. File the appropriate bond; and
c. Serve the debtor.
3. Debtor’s Right to a Hearing
a. If the Debtor properly requests a
hearing, the court must set the hearing within five calendar days of the
b. The issues at the hearing are limited
i. The probable validity of the claim or
claims of the party seeking the provisional remedy and any defenses and claims
of personal property exemptions of the debtor; and
ii. The existence of any statutory
requirement for the issuance of the provisional remedy sought.
4. Attorneys’ Fees.
If a hearing is held and the provisional
remedy is either quashed or otherwise denied, the court may award reasonable
attorneys’ fees to the debtor.
III. THE UNDERLYING REMEDIES: REPLEVIN, ATTACHMENT AND NON-WAGE GARNISHMENT
In addition, to the following the
procedure and requirements for provisional remedies, a party seeking possession
of specific personal property in which the creditor holds an interest may apply
for an order of replevin. Replevin may be used where a party has a security
interest in certain personal property, like a motor vehicle, and where such
security interest has been perfected by filing the appropriate UCC-1 filing or
noting the secured party’s lien on the certificate of title for a motor vehicle.
Generally speaking, we do not use replevins that often for the smaller business
loans since they can be expensive and not worth the cost when compared to the
debt owed. Further, the bank usually has a blanket lien on all business assets
without a specific list of those assets. As noted below, a detailed list of the
property sought is necessary for a successful replevin. It is vital to this
remedy to have the following information:
1. A list of the personal property
2. The location of the personal
3. Its actual value. The actual value of
the personal property is required for the affidavit in support of the
application as well as to determine the amount of the bond.
In order to obtain a replevin
order prior to judgment, a party must:
1. Send a demand letter requesting
the surrender of the property;
2. File the required documents for a
3. File an Affidavit showing:
a. That the party seeking the property
is the owner of such property claimed or lawfully entitled to its possession;
b. A sufficient description of the
c. That the property is wrongfully
detained by the debtor; and
d. The actual value of the property.
4. Execute a bond and deliver it to the
a. The bond must be payable to the
b. In an amount not less than double
the value of the property as stated in the affidavit; and
c. For the return of the property if the
debtor is successful in challenging the replevin. If the debtor is successful in
challenging the replevin and the property is not returned, the party seeking the
replevin must pay:
i. The assessed value of the
ii. All damages suffered by the debtor
by virtue of the taking and detention of the property; and
iii. All costs and reasonable attorneys’
fees incurred by the debtor.
5. Once the replevin order is signed by
the court, it is executed upon by the sheriff by physically taking possession of
the property sought. The party seeking possession of the property should make
sure in advance that it has a place to store the property pending its sale or
C. The Redelivery Bond
Debtor has two days after execution of the replevin order to post a redelivery
bond and have the property returned to him. The amount of the redelivery bond
must also be double the value of the property as stated in the affidavit.
Attachment is used to ensure the
debtor’s property is not disposed of prior to judgment in favor of the
plaintiff. The writ of attachment directs the sheriff to seize and hold
sufficient property of the debtor to satisfy the plaintiff’s potential judgment.
It can be used for personal property as well as real property.
If you know that a debtor has real
property with sufficient equity above the other consensual liens (i.e., deeds of
trust) and the homestead exemption of $150,000.00, attachment can be a great
source to create leverage to ultimately get the debt paid.
There are four bases for seeking a writ
1. In an action upon contract for
payment of money that is not fully secured by real or personal property, or if
originally so secured, the value of such security has, without any act of the
plaintiff, or the person to whom the security was given, substantially
diminished below the balance owed;
2. When an action is pending for damages
and the defendant is about to dispose of or remove his property beyond the
jurisdiction of the court in which the action is pending;
3. In an action for damages upon
contract, against a defendant not residing in this state or a foreign
corporation doing business in this state; or
4. In an action upon a judgment of
1. File the required documents for
a provisional remedy;
2. File an affidavit establishing one or
more bases for obtaining a writ of attachment;
3. Execute a bond and deliver it to the
a. The bond must be made payable
to the debtor;
b. The bond must be in an amount not
less than the amount for which the action is brought;
c. The bond must be approved by the
officer issuing the writ; and
d. The bond must be conditioned that
plaintiff will prosecute his action to effect and will pay all damages and costs
that may be sustained by defendant by reason of the wrongful obtaining of the
4. Upon receipt of the writ of
attachment, the sheriff levies upon so much of the defendant’s property subject
to levy under the writ and is found within the county as is sufficient to
satisfy the writ. Only non-exempt property may be levied upon.
Importantly, the levying officer
will require the plaintiff to execute and deliver an indemnity bond in an amount
double of the claim. This is in addition to the attachment bond. As such, to
obtain and levy upon a writ of attachment, two bonds are required.
F. The Defendant’s Replevin of
the Attached Property
At any time before judgment is rendered
and if the attached property has not been claimed or sold, the defendant may replevy the property by giving a bond to the attaching officer who levied the
Garnishments will be discussed in the
post-judgment section of these materials. A pre-judgment garnishment requires a
IV. MISCELLANEOUS REMEDIES
A. Lis Pendens
A notice of lis pendens may be filed in
any action affecting title to real property. It operates to put a cloud on title
of property subject to litigation during the pendency of the case. It is
designed to prevent third parties from acquiring interest in the property which
may hinder or preclude the court’s ability to render adequate relief to parties
in the litigation with respect to the property. It is typically used in such
actions as judicial foreclosures. Extreme caution must be used in filing a Lis
Pendens. It is only authorized in limited circumstances and wrongful filing can
subject a creditor to significant damages.
V. ENFORCING THE JUDGMENT
It is important to note that Arizona is
a community property estate. Therefore, if you have a judgment against only one
spouse, it makes it difficult to collect on the judgment.
Community property consists of all
property acquired by a spouse after marriage. As such, wages and bank account
deposits are presumed to be community property. However, if a creditor has
information that: (i) the property is subject to a premarital agreement; (ii)
the debtor acquired the property by gift, devise or descent; or (iii) the
property was acquired before the marriage, the creditor may pursue it. Moreover,
we recommend moving forward with enforcing the judgment and leaving it to the
debtor to file the appropriate objection.
A. Recording the Judgment
Once we obtain a signed judgment either
by default or motion for summary judgment, we record the judgment in the county
in which the debtor resides and any other counties where he or she may have real
Once the judgment is recorded, it serves
as a lien on any real property the debtor has or may acquire in the future.
However, there is a caveat: Arizona’s homestead exemption is
$150,000.00. Therefore, if you wish to foreclose, you must determine whether
there is sufficient equity after payment of any superior deeds of trust
and the homestead exemption.
B. Judgments Must Be Renewed Every 5 Years
The judgment creditor, his personal
representative or assignee may within ninety days preceding the
expiration of five years from the date of entry of such judgment, make and file
an affidavit, known as a renewal affidavit to renew the judgment. The renewal
affidavit must be recorded with the county recorder to continue the judgment
lien on any real property.
C. Finding the Assets
The most commonly used method of
obtaining asset information is either an asset search or a judgment debtor
examination. However, there are other means to obtain such information:
1. Dissolution Decrees and Property
2. Statements and Schedules in a
dismissed bankruptcy case;
3. UCC Filings;
4. Secretary of State Department of
5. Credit Reports;
6. Corporation Commission;
7. County Assessor’s Office; and
8. County Recorder’s Office.
D. Judgment Debtor Examinations
Another method to obtain information
concerning a debtor’s assets is the judgment debtor examination. A judgment
debtor examination directs the debtor to appear in court or at the attorney’s
office to answer questions concerning his or her assets. In addition, a creditor
may issue a subpoena duces tecum that requires the debtor to bring certain
documents that identify his or her assets to the examination.
In order to compel a debtor to appear
for a judgment debtor examination in Arizona, one must:
1. File the appropriate motion
with the court.
2. Issue a subpoena duces tecum.
3. Obtain a court order that provides
for issuing a civil arrest warrant against the debtor if he or she fails to
appear on the date and time in the order.
4. Personal service of the debtor
examination documents on the debtor.
Alternative service is not sufficient to
obtain an arrest warrant in the event the debtor fails to appear. If the debtor fails to appear on the
ordered date and time and the debtor was personally served with
the debtor examination documents, then upon request, the court will issue a
civil arrest warrant in the amount of $250.00. We must provide the court with
the debtor’s date of birth, otherwise they will not issue the civil arrest
If a civil arrest warrant is enforced,
we will receive a call from the sheriff or other officer advising that they have
detained the debtor and we may come down and question him or her. However,
please note that civil arrest warrants are rarely enforced in Arizona.
E. Once You Have Asset Information,
What Do You Do With It?
1. Wage Garnishments. If employment information is uncovered,
a creditor may file a wage garnishment. In order to obtain a writ to garnish
wages, the creditor must do the following:
a. Send a letter to the debtor demanding
that payment be made. We have recently revised the demand letter to demand
payment within ten (10) days.
b. After the 10 days has expired and no
payment has been made, a creditor may apply to the court for a writ of
c. Once the creditor obtains and serves
the writ and other necessary documents on the debtor’s employer, the employer,
or “garnishee”, has 10 business days to file an answer to the garnishment.
d. Upon receipt of the employer’s
answer, we file an application and order for continuing lien with the court. It
usually takes 2 weeks or so to obtain the signed order from the court.
e. Once we receive the signed order, we
forward a copy to the employer. Thereafter, the employer must forward an
earnings statement to the creditor or its attorney along with the earnings
subject to the writ of garnishment at the time the writ was served. The
earnings statements and garnishment checks shall continue to be submitted until
either the debt is paid, the debtor files for bankruptcy or leaves the
f. Within 21 days after the end of each
quarter, the creditor must prepare a report that is submitted to the garnishee
and the debtor. Amongst other things, the report must advise of the following:
i. the total amount credited to the
judgment balance during that period;
ii. the interest that accrued during
that period; and
iii. the total outstanding balance due
on the judgment as of the ending date of the reporting period.
2. Objection to the Garnishment.
A debtor or other party may request a
hearing on the wage garnishment. The hearing must be requested within 10 days of
receipt of the answer. The prevailing party at the hearing may be awarded fees
and costs as determined by the court.
3. Default. If the garnishee fails to file an
answer, the creditor may pursue a judgment by default against the garnishee for
the full amount of the underlying judgment.
4. Non-Wage Garnishments. Typically, when one thinks of a non-wage
garnishment, they think of garnishing a bank account. However, there is other
property one can garnish. For example, one can garnish rents, periodic payments
and other contract payments. It also includes escrow accounts, the contents of a
safe-deposit box and stock of a corporation. Importantly, the property subject
to the garnishment is that property in possession of the garnishee at the time
the writ is served. If the garnishee receives property after the writ is served,
it is not subject to garnishment.
a. Bank Accounts. The most common non-wage garnishment is
to garnish the funds held in a bank account. To garnish a bank account, a
i. file an application for a writ of
garnishment and obtain a writ;
ii. Serve the writ on the banking
institution and pay a $25.00 fee to enable the bank to search all of its
branches within the county in which the branch was served for all accounts in
the debtor’s name. Once the bank is served, the debtor’s accounts are frozen;
iii. The bank or “garnishee” has 10
business days to file an answer advising whether they do or do not have funds in
the debtor’s name;
iv. If the bank has funds in the
debtor’s name, the creditor must file an application for judgment against the
v. Once the judgment is entered against
the garnishee, the creditor must send it to the bank, and the bank will release
b. Objection to the Garnishment.
Like wage-garnishments, a debtor may
object to a bank account garnishment and request a hearing within 10 days of
service of the writ. The objection may assert that the funds sought are exempt
because they are comprised of social security or other exempt funds. In such a
situation, the creditor may want to subpoena the banks’ records to determine
whether the basis for any objection is justified. The prevailing party may be
awarded its attorneys’ fees and costs.
c. Default. If the garnishee fails to file an
answer, the creditor may pursue a judgment by default against the garnishee for
the full amount of the underlying judgment.
5. Writs of Execution.
A writ of execution is a collection
device used to require an officer to take possession and control over a debtor’s
property and sell it to satisfy the judgment. As a practical matter, the
creditor must be able to advise the officer what to execute on and where to find
the property. The officer will not look for it. There are two types of writs.
a. Writ of Special Execution.
A writ of special execution commands the
executing officer to sell certain specific property or to deliver specific real
or personal property to the creditor. All non-exempt real or personal property
and all property and rights to property seized and held under attachment or
garnishment may be executed upon.
b. Writ of General
Execution. A writ of general execution commands the
executing officer to try to satisfy the judgment from unspecified property. The
judgment must be satisfied first from personal property and then real property.
c. The Sale. Once the officer levies upon the
property, he must sell it and deliver the proceeds necessary to satisfy the
i. The officer must provide the
appropriate notice of sale at least 10 days prior to the sale;
ii. The sale of real property is
held at or near the courthouse door of the county where the property is located;
iii. The sale of personal
property may be conducted on the premises where it is taken, at the courthouse
door in the county where the property is located or at some other more
convenient place for exhibiting the property to purchasers if necessitated by
the nature of the property.
iv. The sale is conducted by a public
auction to the highest bidder.
It seems that, more often than not,
debtors are filing bankruptcy these days. Once a debtor files for bankruptcy
protection, an automatic stay is triggered. The automatic stay prevents
creditors from further pursuing a debtor for the debt owed. For example, if a
creditor has a wage garnishment in place, it must be quashed or the creditor is
deemed to be violating the automatic stay and may be subject to an order of
contempt which may include payment of attorneys’ fees.
There are three main chapters of the
United States Bankruptcy Code under which a debtor may file for bankruptcy
protection. These are Chapter 7, Chapter 11 or Chapter 13 bankruptcies.
If a creditor is unsecured, there is
little to do other than file a notice of appearance and we always recommend
filing a proof of claim. A notice of appearance ensures that a creditor or its
attorney is given notice of all significant filings in a bankruptcy case.
All attorneys, including judges,
recommend that a creditor always file a proof of claim even in a Chapter 7 no
asset case. The basis for such a recommendation is that a creditor never knows
whether a trustee will find assets. A trustee may re-open a case for that very
purpose. If a proof of claim is filed, the trustee will know where to find the
creditor to distribute any proceeds from the sale of the late discovered
If a creditor is secured, then in
addition to filing a notice of appearance and proof of claim, it may wish to
pursue its collateral whether real property or personal property. In the event a
secured creditor wishes to pursue its collateral, it must file a motion for
relief from the automatic bankruptcy stay.
In a Chapter 13 case, it should also
review the Chapter 13 Plan to evaluate whether the creditor is treated
appropriately and in accordance with its loan documents. Also, the Chapter 13
Plan should be reviewed to determine whether it’s feasible. This means that the
debtor’s payments to the trustee are sufficient to make the payments proposed in
the Plan. If the creditor is not treated appropriately and/or the Plan is
unfeasible, the creditor should file an objection to the Plan.
It is important to note that even if one
spouse files for bankruptcy, a creditor may not pursue any community property.
When one spouse files for bankruptcy, all of a married couple’s then existing
community property becomes property of the bankruptcy estate. Technically the
debt of the non-filing spouse has not been discharged and a creditor may pursue
any non-exempt separate property. However, a creditor cannot pursue any property
considered community property to satisfy the debt.
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