Many times family members are bequeathed a home from their parents. In some cases there is dissention amongst the benefactors as to what should be done with the home. Then one of the new owners goes into bankruptcy, and all of a sudden this house that they are part owner of is now part of the bankruptcy estate. It may be that the home doesn’t qualify for an exemption. So what happens to the co-owners share?
The bankruptcy trustee may order that the house be sold, unless the co-owners can come up with the money to buy out the portion that the co-owner who is going bankrupt owns. If this cannot be done then the trustee can order the house to be sold. Out of the proceeds of the sale the co-owner would receive their share. The bankrupt co-owners share of the money would go into the bankruptcy estate to be used for some of the listed creditors.
It is very important for an individual who is going bankrupt to utilize the services of a Fort Worth bankruptcy attorney. Not just in a case like this where there is co-ownership of property but for any circumstance. The bankruptcy rules can be complex and it is imperative that everything be done properly and a bankruptcy attorney will work in the best interests of the individual who has hired them to assist with their bankruptcy. Even individuals like the co-owner in this example here should seek out the services of a bankruptcy lawyer even though they are not the one going bankrupt.