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Marcus Parker
Marcus Parker, Attorney
Category: Bankruptcy Law
Satisfied Customers: 460
Experience:  practicing attorney including bankruptcy
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I am separated from my husband and I am filing Chapter 7.

Customer Question

I am separated from my husband and I am filing Chapter 7. He still lives in the house we co-own and I live somewhere else. In the divorce documents, it states if I sign the deed over to him, upon future sale of the property I would get 30% net. How can I keep the house out of danger in my bankruptcy. I don't want anything to happen to it since he and my daughter live there. Same issue for the car. He drives and pays for it but it is still in both of our names. I don't want anything to happen to it either. How do I list this in my bankruptcy that I am still listed as a co-signer/co-owner on the house and the car but I don't want them involved in the bankruptcy since I am the only one filing? Do I still need to have a homestead declaration and use a homestead exemption (We both live in VA)? I am signing the car over to my ex in the divorce settlement. The house has an equity loan (2nd mortgage) that I pay at least until divorce is settled in Feb. How do I handle that?
Submitted: 9 years ago.
Category: Bankruptcy Law
Expert:  Marcus Parker replied 9 years ago.

It appears that the interest which you own in the house (the car too, apparently) is essentially the right to receive money when the property is sold. These interests are not, as far as you are concerned, exempt (other than possibly under the blanket bankruptcy code exmption). But that doesn't matter; as I understand what you are saying, they don't have to be sold by any time certain. So, if that is what your divorce decree provides, you don't have to be concerned that they are "in danger" because of your bankruptcy. If you have in fact signed them over to him, the bankruptcy trustee can not take and sell them because you don't have the right to sell them and get the proceeds.

On the other hand, the property will be sold someday (when he dies, or whenever). At that time, you, or your heirs, would be entiltled to 30%. This expectancy, whatever it is worth, can be sold, and the proceeds would go to the trustee in behalf of the unsecured creditors.

Customer: replied 9 years ago.
But what about Virginia's Tenancy By the Entirety which says the house can't be sold since it is owned by both of us but only one is filing? I understand your answer but I don't understand how an interest of 30% can be sold and since the divorce won't be final until Feb. I have nothing that states the 30% so it assumed now that I own half, right?
Expert:  Marcus Parker replied 9 years ago.
You didn't tell me that the divorce is not final yet, and that your agreement is not in writing.