Ready to say goodbye to student loan debt for good? Learn More
2020 Best Invention

What Is Community Property?

3 minute read Upsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card. Explore our free tool

In a Nutshell

There are nine community property states. Alaska also allows married couples to opt into a community property arrangement. Community property states typically consider any property acquired during a marriage to be jointly owned by both spouses, regardless of who made the purchase or what the title says. This is important in bankruptcy because creditors may be able to access community property if one spouse files bankruptcy.

Written by Jonathan Petts
Updated June 29, 2022

The term community property can be confusing. Most of us have heard the term in connection with the way property is divided in a divorce case. But the difference between community property and separate property is important for other reasons. For instance, the creditor of one spouse may be able to reach community property (for example, through repossession) even when they would not be able to reach separate property of the other spouse. 

Here’s how community property states are different, why it matters to you, and how it may impact debt collection and bankruptcy.

Community Property States

Nine U.S. states are community property states. That means they consider most property acquired during marriage to be joint property of the spouses, no matter how the property is titled. 

Imagine, for example, that one spouse purchased a boat during the marriage. The boat was purchased with that spouse’s own earnings and titled only in that spouse’s name. In a community property state, that boat would generally be considered community property from the moment of purchase. In a state without community property laws, the boat would be the separate property of the spouse who purchased and registered it.

The community property states are: 

  • Arizona

  • California

  • Idaho

  • Louisiana

  • Nevada

  • New Mexico

  • Texas

  • Washington

  • Wisconsin

Specific rules are different from one community property state to another. For instance, California is a community property state, but spouses can agree to classify their property differently. Alaska is not a community property state, but married couples can agree to opt in to a community property arrangement. 

Community Property vs. Marital Property

The concept of community property can be tough to understand because it’s often confused with marital property. During a divorce, the rules for what is considered community property and what is considered marital property are similar. But there are two key differences in how these terms are used in most states. 

The first difference only comes up in a divorce case. In a community property state, most property acquired during the marriage is divided 50-50 between the spouses. In a common law state (sometimes called an “equitable distribution state”), the court divides property acquired during the marriage in a way they think  is fair to both parties. So, even if the marital property is exactly the same, the way it’s divided may be different.

The second difference matters all the time. In a common law state, each spouse can buy or receive separate property during the marriage. In the example above, the spouse who bought the boat and registered it in their own name would own the boat during the marriage. Generally, creditors of the other spouse couldn’t touch the boat. And, if the spouse who owned the boat died, it wouldn’t necessarily go to the surviving spouse. That would depend on the terms of the boat owner’s will. 

In a community property state, most debt one spouse takes on during the marriage is considered community debt. Creditors can go after community property to pay community debt. So, the other spouse’s creditors might be able to pursue the same boat, bought and registered the same way.

Upsolve User Experiences

2,192+ Members Online
Ingrid Brown
Ingrid Brown
★★★★★ 1 day ago
Upsolve has helped me so much!!! They saved me thousands of dollars using their services instead of an over priced attorney
Read more Google reviews ⇾
Brandi Bederka
Brandi Bederka
★★★★★ 2 days ago
Thank God for this company! It's not easy having to come to terms with filing bankruptcy, and it's safe to say leading on to making this decision that life hasn't been going your way. But with Upsolve this company shines that little light at the end of the tunnel with how helpful and easy it is to file bankruptcy on your own because truly with this company you are never alone. They are there every step of the way. I am beyond grateful to have discovered Upsolve.
Read more Google reviews ⇾
John Heffernan
John Heffernan
★★★★★ 6 days ago
easiest thing ive ever had to do with or for the governmet regarding paperwork. i was worried that it was going to take weeks and months and i had it all done within 4 days time from start to finish and filed. it was also a matter of 20 minutes at the federal courthouse to file quick and painless the lady at the window was actually thrilled that i used upsolve because she said the people who use it always have zero problems or far and few between... i highly recommend using this sevice.
Read more Google reviews ⇾

What Is Separate Property in a Community Property State?

Again, community property laws vary slightly from state to state. Generally, in a community property state, property will be treated as separate if:

  • One spouse owned the property before the marriage

  • The property was gifted to or inherited by one spouse alone

  • The property was purchased separately and not mingled with community property

  • The spouses have agreed that the property will be separate, following the laws of their state

Bankruptcy in a Community Property State

If you’re married and considering filing bankruptcy, you may be unsure whether you should file individually or with your spouse. The answer is different for everyone. When making the decision, it’s important to know whether you are in a community property state. 

In a common law state, only property the filing spouse actually owns is listed in the bankruptcy schedules. In a Chapter 7 case, the trustee can only take non-exempt property belonging to the filing spouse to pay creditors. So, if one spouse has accumulated a lot of debt during the marriage and the other has not, it may make sense to file individually.

In a community property state, all community property must be listed in the bankruptcy. Most debt that either spouse accumulated during the marriage will be considered community debt. And non-exempt property of the community can be used to pay community debt. That means the other spouse’s share of community property may be at risk. 

On the other hand, community property isn’t available to pay separate debts of one spouse. So, if the filing spouse accumulated most of the debt included in the bankruptcy before marriage, the case will play out very differently. 

Let’s Summarize…

If you’re considering bankruptcy or just facing problems with debt, it’s important to know whether you live in a community property state. It’s also important to figure out what property belongs to you or your spouse individually and what is community property. If you’re unsure of how your property will be treated in debt collection or bankruptcy, you may want to consult an attorney.

Written By:

Jonathan Petts


Jonathan Petts has over 10 years of experience in bankruptcy and is co-founder and CEO of Upsolve. Attorney Petts has an LLM in Bankruptcy from St. John's University, clerked for two federal bankruptcy judges, and worked at two top New York City law firms specializing in bankrupt... read more about Jonathan Petts

It's easy to get help

Choose one of the options below to get assistance with your bankruptcy:

Free Web App

Take our screener to see if Upsolve is right for you.

Take Screener
13,104 families have filed with Upsolve! ☆

Private Attorney

Get a free bankruptcy evaluation from an independent law firm.

Find Attorney

Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →

Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can't access their basic rights when they can't afford to pay for help. Combining direct services and advocacy, we're fighting this injustice.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.