I walked, she stayed...what about the house?

[gunnagtthr]

the question in my past posting has been answered, and now I have a new one. Here is a recap of the scenerio: A relationship went awry and I moved out. We are co-owners of the house. I am bankrupt, and she is not (funny how that works out ). Since I do not occupy the home, it is not exempt for me. There is about $40k equity total in the house.
My ch. 7 will, of course, include the house, which I will be discharged from.
Here are my questions:
1. what is the chance the trustee will force a sale to get a hold of my portion of the equity?
2. Let's assume the trustee does not have an interest in the house. Then, am I also taken off of the title through the bk so that I have no asset in it? Is all of the asset automatically given to her?
3. My attorney would not speak for her rights or non rights, but what he did say several times is that she DOES fall under the homestead exemption. What does he mean, exactly? He made it clear that he represents me and getting that debt discharged.
4. What possible scenarios am I looking at regarding this house? I realize that I can kiss most things goodbye, but if the trustee is not interested in the house, am I also kissing my equity goodbye just by filing?
I hope these questions make sense and that there arent too many of them. Thank you so much in advance!

[ValleYum]

Looking at this very simplistically, won't the 60k homestead exemption your ex is entitled to claim (which may be what your lawyer is hinting at by stating she has homestead rights) + the mortgage balance on the home put the house out of the reach of the trustee? The trustee would have to pay a Realtor and pay your ex before they would gain anything to distribute to creditors from the sale of the property. I am not a lawyer but that is how I read the exemption info... I am also tired so caveat emptor!

I have no idea what that does for you down the road if she ever sells the house but your name on the deed and mortgage means that you will have to sign off for any future title transaction should she sell. What you could get from her in this situation would be the ? of the day IMHO. Do you guys have any written agreement about this?

PS: Here is a good blog by a Colorado BK attorney discussing homestead exemptions (bottom of the 3rd paragraph is interesting, too):

www.davidserafinlaw.com/lawyer-attorney-1790033.html

PPS: Does your forum name mean Gonna Get Her or Gonna Get There/Through? LOL

[mountanddo]

My attorney would not speak for her rights or non rights, but what he did say several times is that she DOES fall under the homestead exemption. What does he mean, exactly? He made it clear that he represents me and getting that debt discharged.

I don't understand why he wouldn't discuss this with you. Wouldn't it be in your best interest to understand exactly what the co-owner of the house you are going to discharge rights are? It doesn't sound like you are married so I would think her interest in the house would be like any other investor who purchased a home with another person.

Is there a legal reason I am missing that he can't discuss this with you?

[ValleYum]

I find that odd, too, MD.

[HHM]

1. If spouse is on title and resides in the home, she gets benefit of homestead, I suppose the only issue would be whether she gets the full amount.
2. No, you are not taken off title due to BK.
3. Actually, somewhat typical and the ethically appropriate stance; an attorney cannot advise you about the rights of someone that is not a client and that may have contrary interests to you (the client), upon which no analysis has take place, and upon which you might rely and convey to spouse. [think of it this way, the attorney is not going to put him/herself in a position of "wife said that husband's attorney said I have the homestead" if something goes awry without wife being a client and being paid]
4. Worst case scenario, there is some issue with the homestead or deed of the house that won't allow the claiming of all $60K (the CO Homestead) and therefore a portion of the equity is exposed in your BK. Whether that is a problem will depend on the facts on the ground (who is the house deeded, does she really reside in it, etc), and how the homestead is interpreted given a joint ownership scenario with only one owner residing in the house.

[Phil]

Was this a divorce or you bought as two single people residing together?
Since you moved out, have you contributed to keeping the mortgage, taxes, etc... current?

[keepsmiling]

People usually say if it's a spouse. Doesn't sound like this was.

[ValleYum]

I didn't get the impression they had been married for some reason either KS.


Thanks for the explanation, HHM!!

[gunnagtthr]

Hi everyone...
It was a domestic partnership. We had been together 16 years total, and bought the house in 1999. We are JTWROS on the title. The payments are current, with she and a roommate making the payments since last August. I moved out March 2011, but made my half of the payments for about 6 months in 2011. Renters stayed in the house for 3 months (when the ex left, leaving me the house and the pets to take care of), then she came back in August, resuming payments with a roommate. HHM, you are correct in your assessment of my attorneys response. He basically said exactly what you did.
It is definitely established that the homestead exemption does not apply to me because I don't occupy the house, but she does. My attorney reiterated several times that the homestead exemption applies to her, then stood by his response in HHMs post above. What does that mean?
If I am not removed from the title through the bk, then I was going to ask her if she would agree to share the equity with me when she sells someday. How could that legally be done (of course, after the bk)? I think she would be willing, but we will see.
ValleYum: hahahahaha in my screen name choice...guess I didn't think of that...hilarious! It means "gunna get there" at least I hope I will!

[dman]

Just thinking out loud...don't mind me...but if you had any wildcard exemption left over, I might apply it to that house "just in case." So if the trustee did decide to sell it, he/she should, in theory, have to pay you back the amount you exempted.

[ValleYum]

Sadly, there is no wild card at all in Colorado (that I can find).

[gunnagtthr]

You are right, there is no wildcard exemption.
What do you all think the possibilities are with the house, or what have you seen happen?
The trustee turn the other way vs. a forced sale? Or, something else I haven't even thought of?

[btbeme]

Ex needs to file homestead, like yesterday.

The general equation works like this.... Market value for quick sale (minus) outstanding loan amount (minus) closing costs (minus) homestead (minus) liens (minus) taxes, HOA, and insurance (minus) exemptions = net. Divide net by the number of people on the title to get the potential net cash value of the sale.

The lower the net (or the net cash value of the sale), the less chance the Trustee will diddle with the house. Negative net is good.

[AngelinaCatHub]

I guess we have the best HE here in FL. Nobody can take your house under any circumstances barring foreclosure of mortgage or IRS. Your house is totally protected from seizure. As far as the OP, the little bit of what he could get probably would not be worrying him. It may be years before she sells. The Trustee for 40K if and when it sold is probably not worth his trouble. In this economy they are better off in turning volume of cases than make one a cash cow for that trouble. Only my thoughts. 'Hub