Many of my clients come to me asking how joint property is handled during bankruptcy. If you own joint property, filing for bankruptcy can affect your co-owners. This depends on the following elements:
Although your assets will become property of the bankruptcy estate when you file for bankruptcy, the Chapter 7 trustee can only sell your nonexempt property to pay back your creditors if you have too much equity. The value of any nonexempt assets must be paid to your unsecured creditors in your repayment plan for Chapter 13 bankruptcy.
In almost every bankruptcy case, exemptions allow you to keep all of your assets. Any asset that you can exempt, you will be able to keep. As a result, if your jointly owned property has no equity or is fully exempt, it will not be affected by your bankruptcy.
In rare cases, the trustee can sell the interest of a debtor and non-filing spouse. The trustee must pay the non-filing spouse’s interest in full.
For more information on jointly owned homes, contact me today for free consultation. As an experienced bankruptcy attorney, I will analyze joint property interests. A client should know, before the case is filed if there are any issues of this sort. The vast majority of bankruptcy filers keep their assets while discharging their debts.