Q: My husband and I are planning to file Chapter 7 and we want to sell our house that has equity. Can we sell now, or sho
The reason we want to sell the house is because we're filing for divorce and want to sell the marital home. We are not in a position where we have to sell, but would like to know if the equity is protected. "
A:
Selling a home shortly before bankruptcy could easily mean converting an exempt asset (the value in your home, or part of it) to a non-exempt asset that the trustee could claim for distribution to your creditors. Arizona has a large homestead exemption, so the risk could be substantial.
This is not a decision that you should be making without complete information based on the specifics of your circumstances. I would strongly recommend consulting a local bankruptcy attorney before taking any action.
*Kevin Chern is an Illinois licensed attorney who has practiced in federal consumer bankruptcy law and consumer protection law for the last 21 years. He is the Managing Partner of UpRight Law. Kevin's law partners are licensed in all 50 states and work in conjunction with Mr. Chern to provide bankruptcy and consumer legal services in all 50 states. Mr. Chern's answers to the questions are intended for informational purposes only and are not intended to be legal advice. Use of the answers does not establish any attorney-client relationship. For legal advice, you should consult with an attorney licensed to practice law in your state and with appropriate expertise.
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