How does "equitable title interest" work in bankruptcy?
For example, in Utah we are not a community property state, but we are an equitable property state. If a husband and wife are married 10 years and lived in the home together for 10 years each gets half the equity
of the property in a divorce most of the time.
Suppose the husband is on title to the home and the wife is not and the wife files for bankruptcy by herself.
Suppose the equity is $100,000. Can the chapter 7 trustee
seize the $20,000 in equity that is not exempt even if she is not on title due to an equitable title claim?
Here is the calculation:
$30,000 husband homestead exemption
$30,000 wife homestead exemption
Husband gets $50,000 equity for his half and wife gets $50,000 equity for her half
$20,000 is left over unexempt for the wife who filed bankruptcy.