If I file bankruptcy alone, will my spouse (husband/wife) lose his/her home and car?

Maybe.

I just got off the phone with a woman who wanted to file a single chapter 7 bankruptcy and keep her husband out of it.  However, they owned a home which was only titled in his name.  She wanted to know if the trustee would go after the home.

Often couples will put all of the assets into one spouse’s name to protect them from creditors and/or from the trustee, but this doesn’t work.  If you file bankruptcy, the trustee will ask if your spouse owns any property separate from you, like a home or a car.  If he/she does, then the trustee will ask if this home or car was purchased before or after you were married.

If your spouse owned the home or car prior to marriage, then it’s not yours, and the trustee has a hard argument to make that your spouse would have to turn it over.  But if you bought it after being married and simply never put your name on title to protect it later, the trustee will look at the piece of property, see if you have an equitable interest in it, and then possibly demand half of the value of the asset.

Today, it didn’t matter.  They bought the home after they were married, her name was not on title, but he had a mortgage for more than the home was worth.  The home had no equity, so even if the the trustee demanded half of the equity, half of nothing is still nothing, and the home was safe.

This is not legal advice.  If you need help go to www.robertspaynelaw.com.

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