When someone files a Bankruptcy, the court looks at everything they own, and allows them to keep certain assets. (These are called the "exempt" assets.) If the debtor owns more assets than the exemptable amount, those assets must be turned over to the Bankruptcy court
Probably the most significant assets a debtor owns are a house and a car. In California the debtor can keep a house if her share of the equity
in it is less than $75,000
. If you own half of the house (and you do, even though your sister "technically" owns it), then her share of the equity is $75,000
, so she should be able to keep the house. Additionally, she would be able to keep a car with equity (market value minus balance on car loan) of less than $2550
Her filing of a Bankruptcy will no
affect on the mortgage on the Kadi house, and will have no
affect on your or your husband's assets, including the Harrington house.