Does my domestic partners bankruptcy affect my business? 9 Answers as of April 29, 2011

My domestic partner is claiming bankruptcy because of his overwhelming credit debt, up in the high 200,000s. I am concerned for my online business. Is this going to be impacted? I am barely getting it off the ground, and do not want to have to liquidate my assets.

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Law Office of Larry Webb
Law Office of Larry Webb | Larry Webb
Are you registered domestic partners? In California registered domestic partners have all the same State law rights and liabilities as married persons. Bankruptcy is federal law and does not recognize State Law re domestic partners HOWEVER Bankruptcy follows state law regarding creditor exemptions. You and your partner share the exemptions.

Does your partner have any ownership rights in your business? If so your partner's interest in your business is part of his bankruptcy estate. Otherwise probably not.
Answer Applies to: California
Replied: 4/29/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
This is a tricky question. I am going to assume by the use of the term "domestic partner" that you and your partner are a gay couple. Now what this meas could vary from state to state. In California (where I am licensed to practice) that means you and he own everything acquired after the union as "community property." That means the bankruptcy court could look at your assets as well, BUT there is the "Defense of Marriage Act" which sorta shoots them in the foot on that. BUT, the feds are not enforcing it right now.... so it is kind of a grey area right now. Get a good lawyer who is willing fight for you on this. Having said all of that, it might be a non-issue as there are "exemptions" in bankruptcy which would allow both of you keep certain items of property. It may turn out that everything the two of you own is exempt and not available to your creditors.
Answer Applies to: California
Replied: 4/27/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
Whether a Spouse, Domestic Partner or other Significant Other, the only time their filing of a Bankruptcy would affect your credit is if you are also an authorized user on those accounts allowing the credit card company to come after you for payment. Otherwise, it should not affect you or your on-line business.
Answer Applies to: New Hampshire
Replied: 4/27/2011
The Law Offices of Alan M. Laskin
The Law Offices of Alan M. Laskin | Jared B. Gaynor
While many states have made inroads with gay/lesbian civil rights and granting at least some form of "marital" protections, Bankruptcy is federal law based. Since the federal government still does not recognize domestic partnerships, his bankruptcy should have no effect on you directly.
Answer Applies to: California
Replied: 4/28/2011
The Law Offices of Benjamin C. Tiller, Esq.
The Law Offices of Benjamin C. Tiller, Esq. | Benjamin Tiller
Whether your business will be affected depends on whether your domestic partnership gives your domestic partner property rights in your property under your state's laws. The other question would be whether there is any equity in your startup business. If there isn't, then you have nothing to worry about.
Answer Applies to: Montana
Replied: 4/28/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    There is no problem unless your domestic partner is part owner of your business.
    Answer Applies to: Virginia
    Replied: 4/28/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    The non-filing domestic partner's business will be unaffected unless the filing partner has an ownership interest in the business. A new business is probably less vulnerable than one that is well established and valuable.
    Answer Applies to: California
    Replied: 4/27/2011
    Greifendorff Law Offices, PC
    Greifendorff Law Offices, PC | Christine Wilton
    To the extent that your business and your domestic partner are separate entities and your partner has not personally guaranteed any debts for your business, it should be fine.
    Answer Applies to: California
    Replied: 4/27/2011
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