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mmdesq
mmdesq, Attorney
Category: Bankruptcy Law
Satisfied Customers: 518
Experience:  Attorney with 13 years experience.
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In the state of VA if you own a home with two other people

Customer Question

in the state of VA if you own a home with two other people and you file bankruptcy can the courts make you sale the home
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  mmdesq replied 1 year ago.

Good Evening,

I will try to best answer your question.

The bankruptcy estate will have an ownership interest in any property that is title in your name even if it is jointly held. The question is whether not there is any equity in the property after deduction of secured debts. If your portion of equity is larger than what you were able to exempt then a trustee could attempt to force the sale. The other owners would have the option to buy out your interest rather than selling.

I would recommend getting an appraisal where you can control evaluation. Appraisals are estimates and are only an opinion as to value. If you hire the appraiser and state the purpose of the appraisal I do not believe it is inappropriate to ask him or her to come in on the low end of a valid range. Quite frankly this analysis should have been performed prior to the bankruptcy being filed that way if there is excess equity you could choose not to file if it would be exposed.

Customer: replied 1 year ago.
the home is a small 2 bedroom that was left to me and my other 2 siblings when our parents passed away the tax papers have it valued at 84,000.it is paid off. but isn't there something called a " homestead " bankruptcy that would protect the house from having to be sold ?
Expert:  mmdesq replied 1 year ago.

There is a homestead exemption. However, this amount is not unlimited. It is approximately $22,000 under the federal exemption. You would be allowed to deduct any current property taxes that still need to be paid as well as the theoretical cost of liquidation, such as 6% for realtor commission in determining the equity. You need to get an appraisal of this property as soon as possible because the fair market value is not necessary the same as the tax assessment. If for example $8,000 is the exposed portion of your equity it is possible that $8,000 could be paid to the bankruptcy estate as opposed to selling the house. Or you are siblings could purchase your interest for $8,000 under my example.

Expert:  mmdesq replied 1 year ago.

Would you kindly rate me please. Thank you.