How is a non filing spouse's real property interest protected in bankruptcy?
For example, suppose husband and wife are on title to a property.
The husband files for bankruptcy. The wife does not.
The house is worth $300,000 with $100,000 in liens.
Each party could claim $100,000 of the equity
A chapter 7 trustee
could argue that he wants the non exempt portion of the husband's equity. The husband can claim Utah's $30,000 homestead exemption.
This give the following calculation:
$100,000 equity for husband
$24,000 selling expenses (estimated at 8% of the value)
$30,000 husband homestead exemption
$46,000 net equity available to the trustee ( I am assuming the wife doesn't have to be penalized for the selling expenses).
What protection does the wife have here for her half of the house? Can the trustee sue for a partition action? How would that work?