Business judgement

[by0b]

California
I sued a company in a business dispute and lost. I now have a large judgement against me for their legal fees. i was a self proprietor. We are upside down in our mortgage and with no assets. We are still in business but barely paying the bills to survive. We had a chapter 7 about 5.5 years ago so that is not an option at this point. My wife has nothing to do with the suit and is not mentioned in any documents. Will her bank account in her name only be garnished.

 

[megabux]

It could. CA is a community property state.

 

[Chien]

As megabux explains, because CA is a community property state, your wife’s assets will be vulnerable unless they are not otherwise exempt. If the contents of the bank account are the product of her employment, not only will 50% of that portion be vulnerable but 50% of what could otherwise be acquired by a wage garnishment against her also be vulnerable. In other words, if she is working, she is vulnerable to a wage garnishment of 50% of what could be taken if the judgment were against her in the first instance.

The judgment creditor would have to successfully file a motion under CA Code of Civil Procedure sect. 706.109 to subject her wages to garnishment. Unfortunately, if she is working, there aren’t many defenses to such a motion. Moreover, Family Code sect. 910(a) provides:
“Except as otherwise expressly provided by statute, the community estate is liable for a debt incurred by either spouse before or during marriage, regardless which spouse has the management and control of the property and regardless whether one or both spouses are parties to the debt or to a judgment for the debt.”

If your financial condition remains as you describe, it is probably time to start negotiations with the judgment creditor. No rational entity wants to push an individual/company into bankruptcy, especially when it is not a secured creditor, and nothing in your post indicates that this judgment creditor is secured.