My sister and I are both on title for my house. What happens to my jointly-owned home when I file bankruptcy?

So today a woman calls in who shares the title to her home with her sister.  The home is worth $100,000, and they own it free and clear.  This means that each sister has $50,000 of equity in the home.

If I filed bankruptcy, she would have two options:  we could file a chapter 7, and she would need to come up with $20,000 to pay the trustee in the next month or so (we can protect $30,000 of your equity in a home with your Utah homestead exemption), or we could file a chapter 13 and offer to pay a pot of $20,000 to our creditors to protect the exposed equity in the home.

I then asked her how much total debt she had, and she only had $10,000 in credit card debt.  I told her that bankruptcy was a bad idea.  She could simply take out a home equity line of credit (“HELOC”) for $10,000 and pay the creditors off in full.  Even with her bad credit, someone would lend her the money with all of that equity in the home.  Or, she could get a HELOC and then try debt settlement, and maybe pay less than the full $10,000 to her creditors.

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

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