Joint Ownership of Real Estate and Bankruptcy

[backontrackOH]

My wife's father passed away. She is 1/7th owner of his home, along with six brothers and sisters. One of the brothers is living in the home while making preparations for it to be sold. We are unsure when the house will be ready to sell, and with the market the way it is, just how long it will take to sell once it is ready. How is joint ownership of real estate handled in a bankruptcy? Would it just be considered an asset? Could the courts force a sale because of the bankruptcy?

One of my wife's sisters has offered to buy my wife's share in the home. We were thinking of taking her up on this and shoving the money into our retirement account right away. I realize the money would still count as income in reference to the means test, but we may still be OK on that end. I'm just not sure what to do here. Any advice is greatly appreciated!

[backontrackOH]

Bump, Anyone?

[AngelinaCatHub]

My wife's father passed away. She is 1/7th owner of his home, along with six brothers and sisters. One of the brothers is living in the home while making preparations for it to be sold. We are unsure when the house will be ready to sell, and with the market the way it is, just how long it will take to sell once it is ready. How is joint ownership of real estate handled in a bankruptcy? Would it just be considered an asset? Could the courts force a sale because of the bankruptcy? The Courts could not force a sale. 6/7th other people own the place.

One of my wife's sisters has offered to buy my wife's share in the home. We were thinking of taking her up on this and shoving the money into our retirement account right away. I realize the money would still count as income in reference to the means test, but we may still be OK on that end. I'm just not sure what to do here. Any advice is greatly appreciated! Not knowing the value of 1/7th of that house, It could be significant or petty.

In this day and time, it would be prudent to take the money. However, you must let us know these things. Have you already filed? If not when? Do you have children that it could go into a school account? Many questions therefore elaborate. 'Hub

[StartingOver08]

This is a question that varies by district (regarding the RE ownership and the BK sale). When I was waiting for my 341 hearing with my attorney he was discussing another case with another attorney where the Trustee forced the sale of a home of the non debtor. What happend is a woman (retired in her 80's) had added her grandson to the deed of her homestead that she owned for more than 40 years. There was no mortgage on the house. The grandson filed BK. The Trustee made the grandmother sell the house and give 1/2 the proceeds to the Trustee - because the grandson was on the deed. The reason the two attorney's were discussing it was because the attorneys were completely surprised by the ruling (apparently). So, you probably need to ask this specific question to your attorney about the 1/7 ownership. You may want to put lots of time between the sale of your wifes ownership and the actual BK filing.

[backontrackOH]

Thanks for the input! My wife's portion of the value of the home should be between 10-13K. At this point, with our ongoing medical bills (see other posts), we won't be filing anytime soon. I am thinking it may be our best interest to allow my wife's sister to buy her share and pay off our back taxes ($8K) or put it into a college fund (which would you do?).

[StartingOver08]

Are the back taxes income taxes or property taxes?

If they are income taxes than that plan is excellent. If the taxes are property taxes, are they for your home that you are keeping or giving back. IF you are keeping the home in BK, then again, it is a good idea. If you are giving the home back, don't pay the back taxes.

Be careful if you are putting the money in an exempt asset - like the collage fund, unless you have been funding it for a long time and can show proof.

Also, put time in between this purchase by your wifes sister and the BK - that is considered an insider sale I believe. The Trustee will look back at least one year. This is one of the areas that Trustees examine closely.

[keepmine]

If it's back income taxces and they don't qualify for a discharge in bk then pay those. This is a priority debt and the trustee can't snatch the money back on a preference issue.