Jointly-owned property with siblings, spouse or any other person, concerns most of the filers of bankruptcy. The possibility, of joint-owners losing the interest in the property, is a matter of real concern. The exact effect of a bankruptcy filing, in such matters, depends on the relationship between the joint owners, the process of titling of the property, and the filer’s state exemptions.
The most common joint-owners are spouses. In Florida, property jointly-held by spouses is supposedly by Tenancy by the Entirety, if not specifically mentioned otherwise. This kind of joint-ownership has its own perks as the property in question will be protected from the bankruptcy estate, in case, both the spouses are not filing for bankruptcy, and there are also no unsecured joint debts. However, property jointly-held with the survivorship right does not afford this kind of protection.
Another most common joint-ownership is between siblings. Siblings might jointly-own property inherited from a dead parent or other family members. If that property is not under the protection of the bankruptcy exemption, your sibling or another member of the family faces the possibility of losing their interest in the property because of the bankruptcy filing. Unfortunately, the process of you acquiring the property does not entice the bankruptcy court. Once you have acquired a property, it automatically gets included in your bankruptcy estate, irrespective of whether you purchased it, inherited it or received it as a gift. Thus, if that property is not safeguarded by your state exemption, it can be sold to settle your debts on the request of your bankruptcy trustee, and your co-owner will lose the right on that property. This is applicable in the case of tenants in general, joint tenants, and joints tenants with the survivorship right.
Consulting a competent bankruptcy lawyer will help you in making the right choice of whether to file for bankruptcy or not. To learn more about jointly-owned properties in bankruptcy, reach The Recovery Law Group at Recovery Law Group or call on 888-297-6203. It is one of the best law firms in Los Angeles & Dallas, TX.