How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask socrateaser Your Own Question

socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33914
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
10097515
Type Your Bankruptcy Law Question Here...
socrateaser is online now
A new question is answered every 9 seconds

I am going to file a chapter 7. I hold a mortgage on a home

Resolved Question:

I am going to file a chapter 7. I hold a mortgage on a home that I share with my ex-partner; he is not on the mortgage. We are both on the deed; I put him on the deed 4 years ago, after owning the home solely for 7 years previously. There is about $200,000 equity in a house with a 1st of 107,000 K and a 2nd of 10,500. I have about 23,000 in debt. Will he lose the house? Again, he is not on the mortgage, just the deed. I am the only mortgage holder. We have a joint tenancy in common with right of surviorship. We both live in the home. We are in North Carolina. I do not have a job; he is working but doesn't make much income. He has poor credit and cannot buy the mortgage which is a total of approximately $120K outright, and cannot get a mortgage loan with a bank. I need the money from the sale of the house to pay my debts. Will the bankruptcy proceed and will he lose the house. I do not want to make the house exempt.  The tax value on the house is $324K

Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 1 year ago.
Hello,

Bankr. Code 363(h) permits the bankruptcy trustee to sell jointly owned real estate, even though a joint owner has not filed for bankruptcy. The result of a sale would be that the excess equity would likely be split between you and your ex-partner 50/50 by the bankruptcy court. A similar result would occur, were the property sold by the lender, through a foreclosure sale.

So, when you ask if your partner will lose the house, unless he can bring the mortgage current, then the answer to that question is "yes." But, he won't lose his share of the equity, unless, you have other debts which are so great that they will use up the remaining equity in the property. If you do, then your unsecured creditors would receive the proceeds of sale and your ex-partner would receive nothing.

The choice for your ex-partner is simple: he must buy you out: refinance the property and remove your name from the deed and the loan, so that it is entirely his property. Otherwise, he may lose any economic value from the property as the result of your bankruptcy filing.

Please let me know if I can be of further assistance.
Customer: replied 1 year ago.

Does this matter if I am in North Carolina? The homestead exemption is $35,000. If the house sells for even $250K and the first and second mortages total 120K, and my total debts are $23K, won't there be quite a bit of money left over, even with the 3% the trustee takes, and the bankruptcy lawyer fees? I am approximating about $65-70K. Who gets that money after my debts are paid?

 

And, can my ex-partner contest or prevent the mortgage, and thus the house, from being included in the bankruptcy at the creditors' meeting? Can he make a case for the house not to be sold? I am completely penniless, other than about $2000.00 which I will use to pay for the actual bankruptcy. Also, if my ex-partner cannot buy me out or refinance, what happens to the excess money.

thanks for your responses

Customer: replied 1 year ago.

Does this matter if I am in North Carolina? The homestead exemption is $35,000. If the house sells for even $250K and the first and second mortages total 120K, and my total debts are $23K, won't there be quite a bit of money left over, even with the 3% the trustee takes, and the bankruptcy lawyer fees? I am approximating about $65-70K. Who gets that money after my debts are paid?


 


And, can my ex-partner contest or prevent the mortgage, and thus the house, from being included in the bankruptcy at the creditors' meeting? Can he make a case for the house not to be sold? I am completely penniless, other than about $2000.00 which I will use to pay for the actual bankruptcy. Also, if my ex-partner cannot buy me out or refinance, what happens to the excess money.


thanks for your responses

Expert:  socrateaser replied 1 year ago.

Does this matter if I am in North Carolina? The homestead exemption is $35,000. If the house sells for even $250K and the first and second mortgages total 120K, and my total debts are $23K, won't there be quite a bit of money left over, even with the 3% the trustee takes, and the bankruptcy lawyer fees? I am approximating about $65-70K. Who gets that money after my debts are paid?

 

A: Any money remaining in the bankruptcy estate at the close of the case, is returned to you -- unless your ex-partner convinces the court to pay some portion of the money to him -- under the legal theory that it would be unjust to pay it all to you, because your ex paid money and made improvements towards the purchase of the property.

 

And, can my ex-partner contest or prevent the mortgage, and thus the house, from being included in the bankruptcy at the creditors' meeting?


A: Based upon what you've disclosed, I don't see any grounds to contest the sale.


Can he make a case for the house not to be sold?


A: See above.


I am completely penniless, other than about $2000.00 which I will use to pay for the actual bankruptcy. Also, if my ex-partner cannot buy me out or refinance, what happens to the excess money.

 

A: The money will be returned to you at the close of the bankruptcy, and it will be between you and your ex-partner to decide how to split the proceeds.

 

Hope this helps.

socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33914
Experience: Attorney and Real Estate Broker -- Retired (mostly)
socrateaser and other Bankruptcy Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
< Last | Next >
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
  • http://ww2.justanswer.com/uploads/TL/tleeders/2012-6-13_204815_TSL1.64x64.jpg Terry L.'s Avatar

    Terry L.

    Attorney

    Satisfied Customers:

    2204
    Better Business Bur 15yrs bankruptcy experience. Chicago Bar
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    950
    B.A.; M.B.A.; J.D.
  • http://ww2.justanswer.com/uploads/CO/cortrightlaw/2011-12-5_4117_Kevin.64x64.JPG cortrightlaw's Avatar

    cortrightlaw

    Attorney

    Satisfied Customers:

    490
    Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
  • http://ww2.justanswer.com/uploads/Jay1968/2006-12-03_004423_JoeRossPhoto.jpg JoeLawyer's Avatar

    JoeLawyer

    Attorney

    Satisfied Customers:

    376
    Attorney in the practice of Bankruptcy Law since 1996
  • http://ww2.justanswer.com/uploads/DY/Dylatess/2012-9-11_1968_BHBTemplePhoto.64x64.jpg dylatess's Avatar

    dylatess

    Attorney

    Satisfied Customers:

    370
    35 plus years of experience specializing in bankruptcy law
  • http://ww2.justanswer.com/uploads/US/USLawAnswers/2012-9-20_23143_20090105211638Headshot3b.64x64.jpg Brent Blanchard's Avatar

    Brent Blanchard

    Bankruptcy Attorney

    Satisfied Customers:

    315
    Twelve years experience in all aspects of debtor & creditor BK.