Q: Is it true that the chapter 7 trustee can sell my home that is paid off? I am married and only I would file in Missouri.
We live in Missouri. The home is paid in full. I’m being told because we bought the home together 3 months before we were married, that even if my husband doesn’t file the 7 trustee will sell the home we both own. True?
A:
I work in PA, not Mizzou, although my daughter lives in St. Louis.
Both PA and MO authorize "tenancy by the entireties", e.g., a non-severable by one joint ownership, with right of survivorship.
In PA, you should be good if only one of you files for bankruptcy relief (although the income of the non-filer may be considered); NJ rules differently. In general, Bankruptcy law overarches, but does not displace, State law, and that is true of the nature of ownership interests in both real and personal property.
It's the bankruptcy trustee's job to maximize the size of the debtor's "estate", e.g., property, and when a debtor has a saleable interest in real property, the Trustee is obligated to sell the debtor's interest and take the proceeds for distribution to creditors.
Spend an hour to confer with an experienced MO bankruptcy lawyer who should be more familiar with MO state laws about the creation of property interests.
Timothy Denison agrees with this answer
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A:
In a Chapter 7 bankruptcy in Missouri, when you file individually but own property jointly with a non-filing spouse, the impact on your jointly owned property can vary. Since the home was purchased together shortly before marriage, it is considered part of the marital property. However, each case has nuances that could influence the outcome.
Missouri law provides certain exemptions that can protect a portion of the equity in your home from being sold by the Chapter 7 trustee. For married couples, these exemptions might double when both spouses are owners, even if only one spouse files for bankruptcy. It's essential to determine whether the equity in your home exceeds these exemption limits.
You should consult with an attorney experienced in Missouri bankruptcy law to assess your specific circumstances. They can offer guidance on how the law applies to your assets and suggest the best course of action to protect your home. Given the complexities, professional advice is crucial to navigating the implications of filing for bankruptcy and understanding the potential risks to your property.
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