Thursday, 26 February 2015

If one spouse files chapter 7 BK, and the other does NOT, what happens to the equity in the marital home?

Question

If one spouse files chapter 7 BK, and the other does NOT, what happens to the equity in the marital home?



Answer

The trustee can sell the interests of both spouses (subject to any exemptions) if (a) it is not held as tenants by the entireties, or (b) there is any joint unsecured debt. The non-filing spouse's equity, after paying joint debt, is paid back to that spouse.



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