[CLBS] Use of community property to increase value of separate asset

[D Parker Law PLLC]

My circumstance is this: Wife is looking to file Chapter 7 bankruptcy
without Husband.  Husband purchased a house prior to the marriage, and
Wife has never been put on the deed or the loan. However, community
funds have been used to pay the mortgage and make improvements to the
house since the marriage. Equity in the house is greater than
$100,000.

My reading of the law, particularly In Re Steiner, 459 B.R. 748
(Bankr. D. Idaho 2010), is that the Wife/the Community doesn't have an
ownership  interest in the property itself, which remains non-filing
Husband's separate property.  It would appear that the mere use of
community property to maintain it hasn't transmuted the property into
community property in the absence of other factors showing a gift of
the property to the community.  However the community does have an
interest in the amount by which the property has been enhanced by
community expenditures.

Since we're looking at real property with significant equity, I'm a
bit nervous about the situation.  Any guidance on what you've seen,
factors that have been an issue, or pitfalls would be much
appreciated.



     Dara L. Parker
     Bankruptcy Attorney
     dara at dparkerlaw.pl
     main: 208-287-4664
     cell: 208-991-0433
     www.dparkerlawidaho.com

     This communication may be confidential and protected under the
attorney-client privilege.