QUESTION
How is home ownership affected in bankruptcy?
Asked on Aug 20th, 2013 on Bankruptcy - Missouri
More details to this question:
If a couple separates and the house is in both names, and one files for bankruptcy, how does this affect the home ownership of the other spouse?
10 ANSWERS
Bankruptcy Attorney serving Florissant, MO
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Law Offices of Thomas Corcoran Phipps
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The other spouse till an owner. A creditor of a debtor in a bankruptcy cannot take any collection actions against a co-debtor.
Answered on Aug 27th, 2013 at 10:47 AM
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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It doesn't change the deal with the mortgagee.
Answered on Aug 27th, 2013 at 10:47 AM
Bankruptcy typically doesn't affect home ownership at all unless there is more equity in the property than covered by the exemptions. In Nevada, the homestead exemption is at minimum $125K and can go up to $550K if the home has been owned for several years.
Answered on Aug 27th, 2013 at 10:47 AM
Litigation Attorney serving Stockton, CA
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Patrick Jay Edaburn
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The answer is going to depend on what is done after the bankruptcy and/or during any divorce. Bankruptcy does not impact ownership on the house, it merely eliminates the personal obligation to pay the mortgage. The bank would still have to foreclose, so if the other party chose to continue paying the mortgage they could potentially keep the house. A more serious concern is the fact that once spouse A files then spouse B (assuming they were on the loan) remains personally liable for the debt. You should consult an attorney for both debt/bankruptcy and family law advice.
Answered on Aug 27th, 2013 at 10:47 AM
Bankruptcy Attorney serving Omaha, NE
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Heineman Law Office
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Bankruptcy, by itself, does not affect home ownership.
Answered on Aug 27th, 2013 at 10:47 AM
Chapter 7 Bankruptcy Attorney serving Appleton, WI
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Sisson & Kachinsky Law Offices
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You basically have to be current in pymts and reaffirm on the home to keep it.
Answered on Aug 27th, 2013 at 10:47 AM
Richard hirsh
The ownership interest of the non-debtor spouse is initially unaffected, however if the trustee believes there is equity in the interest of the debtor's property, the trustee may have the ability to sell the entire property and pay the non-debtor spouse his or her share of the proceeds.
Answered on Aug 27th, 2013 at 10:47 AM
2 Awards
It does not affect home ownership.
Answered on Aug 27th, 2013 at 10:47 AM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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This question lacks sufficient information to answer. Separated? Divorced? Separation does not change ownership of a home. Affect? Do you want to know whether you will keep? What is its value? Does it have a mortgage? Do you own it by tenancy by the entities? What other personal or real property do you wish to keep?
Answered on Aug 27th, 2013 at 10:47 AM
Debt Settlement Attorney serving San Diego, CA
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Law Offices of Kathryn Tokarska
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With regard to ownership, if the property market value is less than the loans secured by the property OR if the property market value is worth more than the loans secured by the property but the amount (often called owners' equity) that exceeds the liens on the property falls within an allowable exemption and is in fact exempted in the bankruptcy schedules, then the home would not be sold to pay off creditors. In this scenario ownership does not change and both spouses retain property ownership interest. This assumes mortgage loan(s) are not in default. If they are in default, the answer depends on more facts not disclosed.
Answered on Aug 27th, 2013 at 10:47 AM