QUESTION
How does one of the owners filing bankruptcy affect the other individual regarding the home?
Asked on Sep 26th, 2016 on Bankruptcy - Wisconsin
More details to this question:
Home is paid off and owned by 2 unrelated individuals, both on the deed. One has claimed bankruptcy.
8 ANSWERS
1 Award
If there is equity above the allowed homestead exemption for the person who filed the bankruptcy, then the court-appointed trustee can sell the home and pay the other owner his 50% share (or whatever his share is).
Answered on Oct 26th, 2016 at 7:27 PM
Talk about a vague question! To give you any sort of meaningful answer, I would need to go through a lengthy sequence of questions, including 1) does the person filing bankruptcy LIVE in the house? 2) what is the total value of the house? 3) what chapter of bankruptcy is being filed? You may want to consult a local bankruptcy attorney. Expect to pay a modest consultation fee for this valuable advice.
Answered on Oct 17th, 2016 at 6:24 AM
2 Awards
The owners would have a 50% interest in the property. The debtor only owns his or her 50%. As such, only that portion or ownership interest comes into the bankruptcy estate. If the debtor lives in the home then the debtor is able to claim a homestead exemption.
Answered on Oct 17th, 2016 at 6:24 AM
You are missing too much information to hazard an answer. You should pay an experienced BK lawyer for one hour of their time to explain your rights to you. You have too much to lose.
Answered on Oct 17th, 2016 at 6:23 AM
It would only affect the home if it was not excluded from the case. If it is to become part of the bankruptcy estate half of the value might have to be forfeited.
Answered on Oct 17th, 2016 at 6:23 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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When one co-owner files Chapter 7, the trustee may seek a court order to sell the property and split the proceeds. If a co-owner files Chapter 13, there will be likely be no effect on the property.
Answered on Oct 17th, 2016 at 6:22 AM
Typically the deed would be held as tenants in common, which means that the bankruptcy trustee could force a sale or the non-filing owner would have to buy the other out. This would depend upon the homestead exemptions applicable in your state. Consultation with a bankruptcy attorney would be time and money well spent.
Answered on Oct 17th, 2016 at 6:22 AM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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The most important question is whether the two owners each own 50% of the equity. The next question is whether the owner who files BR has more or less equity than the exempt amount. In Wisconsin, you can choose the Wisconsin list of exemptions, in which you can exempt $75,000, or the federal list in which you can exempt a bit under $23,000, but if you have unused exemption dollars, you can apply them to any other property up to a certain maximum. It's really best to find a skilled bankruptcy lawyer; it's almost always worth the investment.
Answered on Oct 13th, 2016 at 6:26 PM