QUESTION

Can I put the house on the market once they file before it is discharged?

Asked on Jun 18th, 2016 on Bankruptcy - Colorado
More details to this question:
I bought a house with my parents (it's under my name and my father's name). The house is under homestead. I'm in the process of getting married and want to either sell the house or refinance under my name only so my fiancé and I can take the house. My parents have decided to file for chapter 7 bankruptcy. Can the courts actually take the house even though it's a split ownership? Can we put it on the market once they file and if we find a buyer, have the closing for after their bankruptcy is discharge- will that protect the house? Can I refinance and get his name off between when they file and it's discharged? I don't want to wait to get this done because it's holding back my wedding, but I want the house to be protected.
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4 ANSWERS

There is absolutely no way to answer your question without knowing many more facts, including the state where the real estate is located, the state in which the bankruptcy is filed and the applicable bankruptcy exemptions claimed; the value or equity in the real estate.
Answered on Jul 26th, 2016 at 4:05 AM

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Making these decisions without the assistance of an attorney can create a jumbo problem for everyone involved. Sure would have helped if you indicated whether your parents live with you or not, and what amount of equity is in the property. What you are proposing is to sign up for litigation with the bankruptcy trustee assigned to your parent?s case, and for your parents to face potential criminal charges. It is important to have the best bankruptcy attorney involved with this complicated situation.
Answered on Jul 21st, 2016 at 6:08 PM

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Meet with an experienced BK lawyer to get your questions answered. If you do things improperly, it could cause you lots of heartache.
Answered on Jul 21st, 2016 at 11:04 AM

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First things first.: you need an experienced bankruptcy lawyer. It's almost always worth the investment. Second, some questions need to be answered. E.g. What is the fair market value of the real estate? What is the value of your share? Is your equity in the house exempt under applicable law? If, as I imagine, your equity is exempt, then you should be able to sell the hours IF 30 DAYS PASS AFTER THE MEETING OF CREDITORS AND NO CREDITOR OR TRUSTEE OBJECTS TO YOUR CLAIM OF EXEMPTION. A meticulous lawyer might very well want to move for 'abandonment' of the property which simply means that the Trustee has no further claim on it and it just reverts back to you. If your equity is sufficiently above the exemption limits, the Trustee could seek to sell the property, give your father his share, give you your exemption amount, and pay the rest over to unsecured creditors. However, very few people have more equity than the law allows, so this is a rare occurrence.
Answered on Jul 21st, 2016 at 11:04 AM

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