If i file bankruptcy what happens to jointly owned property?
I have significant past debt that is primarily in 3 properties, all in my name, that currently are in a negative equity state. (Debt is 450K in mortgage/secured credit line debt: current equity is is 340K). In addition, I have another 50K in unsecured debt.
Late last year, I purchased a rental property jointly with a partner – it is in both of our names. It currently has positive equity of about 80K.
If i consider bankruptcy, what happens to the jointly owned property that has positive total equity of 80k?
thanks
Posted from: Ontario
The equity in the rental property represents an asset that would vest in your trustee and would have to be realized on to be paid to your creditors. Normally the property would be sold and your share of the equity would be paid into the bankruptcy estate. Of course this would require the cooperation of the co-owner.
If the co-owner did not want to sell or could not agree on a sale price, then he/she could possibly purchase the interest of the trustee. If this was not possible, then a court order for the partition and sale of the property could be obtained. This would effectively force the sale of the property at a court approved price.