My wife owns 99% of our home, will she lose it if I declare bankruptcy

January 8th, 2016 by Questions

My wife owns 99% of our home and I own 1%. She works and has no debt. I am deeply in debt and will probably have to file for bankruptcy. Will she have to pay anything or will it affect our home?

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One Response to “My wife owns 99% of our home, will she lose it if I declare bankruptcy”


January 09, 2016 at 11:50 am, Doug Stuive, CA | Trustee | CIRP said:

If you were to file an assignment in bankruptcy the trustee would have to take steps to determine if you are required to make any payments to your bankruptcy estate because of the home. The first thing that will be required is to obtain a valuation of the home and confirmation of any mortgage owing on the property. With this information the trustee will be able to determine if there is any equity available for your creditors. Equity in very general terms is the estimated amount of money that would be available should you sell the home, after paying out any costs associated with selling a property. If there is equity in the home, your share of that equity would only be 1% of the total house equity.

Depending on where you live you may have to make payments to the trustee so that the 1% of house equity is paid into your bankruptcy estate for the general benefit of your creditors. In many provinces there is a minimum amount of house equity that is exempt from seizure by the creditors.

You should also be prepared to answer questions relating to the property as the Trustee needs to determine the proper treatment of this asset under the Bankruptcy Act. Questions may include whether or not you have always only had a 1% interest, when the house was purchased, the purchase price and down payment and/ how the purchase was funded.

Your bankruptcy should not affect your spouse’s credit rating in any way and should have no effect on renewing your existing mortgage.

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