QUESTION
Can I lose my home if the other person files bankruptcy?
Asked on May 21st, 2013 on Bankruptcy - Delaware
More details to this question:
One person is filing chapter 7. The house is in both our names. I make all payments. The other person doesn't live in it.
9 ANSWERS
Debt Settlement Attorney serving Chicago, IL
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Law Offices of Daniel J. Winter
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Whether or not someone loses their home depends on the equity in the home. That means that it depends on how much the home is worth, then subtracting the amount owed on the mortgage(s), determining how much that person's share of the house is worth. The bankruptcy trustee will review this and decide if there is more equity than the person who filed Chapter 7 can keep, which is $15,000.00 in Illinois. It is best that whoever is filing the bankruptcy speak to an experienced bankruptcy attorney before filing the case to review all of the facts.
Answered on May 24th, 2013 at 1:02 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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It depends on the value, the debt and the exemptions in your state.
Answered on May 23rd, 2013 at 3:15 PM
General Practice Attorney serving Coeur d'Alene, ID
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Michael B. McFarland, PA
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It depends, among other things, on the amount of equity in the home, whether there is a homestead or other exemption(s) applicable to the property, and the nature of your joint ownership [e.g., tenants in common, community property, joint tenancy, etc.] You and the other person should discuss this with an experienced bankruptcy attorney before the other person files, if possible.
Answered on May 23rd, 2013 at 3:14 PM
If you continue to keep the mortgage payments current, the mortgage company cannot foreclose on the property. The question really is whether the Chapter 7 Trustee in the other person's case will be able to take an interest in the property. You are each a 1/2 owner of the property and each own 1/2 of the equity, if any. He is entitled to a $40,000 exemption on his 1/2 of the equity. If his 1/2 is more than that, then the Trustee might want you to buy out part of his equity.
Answered on May 23rd, 2013 at 3:14 PM
Personal Injury Attorney serving Glendale, CA
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JT Legal Group
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If you are current you won't lose it. If you are not current or need to catch up on payments, then you should consider Chapter 13 for yourself.
Answered on May 23rd, 2013 at 3:12 PM
I would need to know whether there is any equity in the house. If the house could be sold for a profit after paying off the mortgage, the bankruptcy trustee may approach you to buy out your co-owners interest in the house.
Answered on May 23rd, 2013 at 3:11 PM
Sanford M. Martin
You may retain the residence with the consent of the holder of the mortgage; you are advised to contact the lender regarding negotiating such agreement. Even if both of you wanted to continue your present arrangement, in Chapter 7 you can reaffirm your mortgage and retain the residence. Many filers do retain their homes, autos, and other property by reaffirming the debt and signing a revised contract with the lender. You may need to consult with an attorney or financial specialist regarding the issues you decide are most important.? E.g., you may want to continue the mortgage with or without the one who is filing for Chap. 7.
Answered on May 23rd, 2013 at 3:10 PM
Chapter 13 Bankruptcy Attorney serving Bloomington, MN
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Gregory J. Wald
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If there is no equity in the residence (you owe more on it than it is worth) or if the bankrupt person's equity was exempt in the bankruptcy case, then you will not lose the property as long as you make the payments.
Answered on May 23rd, 2013 at 2:23 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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As long as mortgage is current and you keep current you should be fine.
Answered on May 23rd, 2013 at 2:22 PM