QUESTION
How does filing bankruptcy affect an inherited family home?
Asked on Feb 19th, 2013 on Bankruptcy - Michigan
More details to this question:
Earlier this year my grandfather passed away and his home was left to my brother and I. There is no mortgage on the home, but there is outstanding property tax of about $25,000. Estimates on the value of the home vary between $150,000 to $215,000. My brother and his family live in the house and are taking care of the tax debt as well as maintenance, upkeep and necessary improvements since my grandfather let the house fall into disrepair prior to his death. I am considering bankruptcy due to overwhelming medical bills, payday loans and credit card debt. I'm wondering how my filing a chapter 7 bankruptcy would affect the home since both our names are listed on the title as joint tenants. I live in a small apartment with my elderly grandmother, work a full-time job at a preschool and my income is not enough to keep paying all my creditors and continue to provide for the necessities of life for my grandmother and myself but I don't want my mistakes to impact my brother and his family. Is there any way for me to get a fresh start while keeping the family home?
13 ANSWERS
Why file bankruptcy? You could just quit making the payments, negotiate with the creditors or ignore them. It sounds like they couldn?t collect a judgment. Your creditors could get your interest in the home whether you file bankruptcy or not. You should consider moving into the home so you can file a homestead.
Answered on Apr 01st, 2013 at 2:55 AM
Family Law Attorney serving Lansing, MI
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Osborne & Barrett, PLLC
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Under the circumstances you gave, you DO NOT want to file a Chapter 7 bankruptcy.
Answered on Feb 21st, 2013 at 11:51 PM
Based on the information provided, you could file bankruptcy but keep in mind that you are able to exempt a certain amount of the home, the amount will depend on your age and whether or not you live in the home. In addition, the Trustee may request some of the equity from the home, however it will only be half since you are only part owner of the home.
Answered on Feb 21st, 2013 at 11:16 PM
Richard hirsh
If you were to file bankruptcy your interest in the 3 house would be part of the bankruptcy estate and subject the entire property to sale by the trustee. Your brother would receive his 50% interest from the proceeds and your 50% would be used to pay your creditors. Since you do not live in the property you would not receive any homestead exemption. Transferring the property would not be a good idea and only make things worse.
Answered on Feb 20th, 2013 at 11:00 PM
You are between a rock and a hard place for sure. Your share of the equity in the home (conservatively, about $75K) is an asset that the bankruptcy trustee will want to use to pay down your debts. You can protect about $20K of that (which you would get as cash) if he decides to take and sell the home. Your brother would get half of the proceeds of the sale and the trustee would distribute the rest to your creditors. The only way I see you filing without the home being sold is if your brother buys you out. Be very careful though that he pays a fair price or the trustee will simply undo the transaction and sell it himself anyway.
Answered on Feb 20th, 2013 at 9:38 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 where you live and where the property is located and whether or not you are living in the property. It is best to talk to a good bankruptcy attorney. Please understand that bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step. Most Arizona bankruptcy attorneys offer a free consultation about the basics of bankruptcy.
Answered on Feb 19th, 2013 at 11:07 PM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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You need to consult an attorney. Protecting the inherited home will take careful planning and analysis.
Answered on Feb 19th, 2013 at 11:06 PM
In order to protect your interest in the property and still file bankruptcy, you would need to be able to claim an exemption in the property. In most states, that means you must be eligible to claim a homestead exemption, and to do this would require you to live in the property. I urge you to consult with a local bankruptcy attorney for further advice because the amount that can be protected by the homestead varies widely from state to state.
Answered on Feb 19th, 2013 at 11:05 PM
Deborah F. Bowinski
With what is at stake you MUST consult with and retain an experienced bankruptcy attorney. The property that you can protect from your creditors (and from your trustee in a bankruptcy case) is determined by each state and varies significantly from one jurisdiction to another. Only a a bankruptcy attorney in your jurisdiction should be advising you as to what you can and can't keep, as well as what your best options are and what to expect as far as bankruptcy.
Answered on Feb 19th, 2013 at 11:02 PM
Complex Litigation Attorney serving Costa Mesa, CA
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Thomas Vogele & Associates, APC
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Your interest in the home would be property of your bankruptcy estate and the trustee could sell it to pay your creditors. There are many factors that come into play, but since this is not your primary residence you cannot exempt your equity as you would if you lived there. You should contact an experienced bankruptcy attorney and evaluate your options. This is a complex question that has no easy answer.
Answered on Feb 19th, 2013 at 11:01 PM
Personal Injury Attorney serving Reno, NV
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Law Offices of William D. Cope, LLP
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Your brother's interest in the property may be protected by a Homestead exemption. But, in the event that you filed bankruptcy your chapter 7 trustee may be capable of compelling a sale of the property, paying your brother the value of his percentage interest and taking the balance of the proceeds of the sale to be distributed in the bankruptcy. There are certain other options that you could consider before filing bankruptcy such as selling your interest to your brother prior to the bankruptcy. Do not hesitate to contact me should you desire to discuss this further.
Answered on Feb 19th, 2013 at 11:00 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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You would need to list the property, show that you are a fifty percent owner, and then figure out a way, after exemptions, to buy the interest back from the Trustee.
Answered on Feb 19th, 2013 at 10:58 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Your inherited interest is your asset must be declared in a bankruptcy and will have an effect on your ownership of it. You need to consult with a bankruptcy attorney for particulars.
Answered on Feb 19th, 2013 at 10:57 PM