Property With 2 Owners

property with 2 owners

Property With 2 Owners

I have a property which is under two names. One of the two people  is planning to file a bankruptcy.  Will the bank take the property away? Should I wait till the person who is bankrupt obtains the bankruptcy discharge to sell the property?

Answer:

The bank will only take the house away or the property if you are behind in the mortgage payments.  The big question is does the property have equity? To determine the equity we need to know the value of the property and the balance of the mortgage outstanding.  In most cases the bankrupt person can negotiate with the trustee to keep the house by continuing to make the mortgage payments and pay any equity in the house to the trustee who will distribute those funds to the creditors. It is usually better to wait until after a person is discharged to sell a house. If a buyer finds out the vendor is bankrupt this results in a  a low offer as the buyer thinks the vendor is desperate to sell.

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