I am a joint home owner property with my ex-husband. We are awaitng sale of the home. He has a home business.

This is an extremely complex problem. Much depends upon the nature of your divorce judgment. As a general rule, domestic support obligations (i.e.,child support and spousal support) are not dischargeable in bankruptcy. So even if he files for bankruptcy, he'll still owe you the share of the property - if that debt is construed as a support obligation. I recommend you take your divorce judgment to an attorney and have them review it.

This is really a bankruptcy law question. I do not practice bankruptcy law. It is a very specialized area of law. I can say that as a joint owner you have rights in the property that are severable from your husband's rights in the property. In general, his creditors step into his shoes and assert his rights to the property. However, it is possible that these creditors may have some claims on your property depending on the basis of their debts. Before he files for the bankruptcy, you need to consult with his bankruptcy attorney or your own to make sure your rights are protected.

First of all, assuming that the divorce is a true divorce and not a sham, the bankruptcy court will treat the property as if only the 1/2 interest that your husband owns is subject to the bankruptcy. This means that your 1/2 is not affected. But be aware that a bankruptcy court can declare a divorce a sham if the only reason for the divorce was to reposition assets and debts before filing for bankruptcy. This can and has happened. So it is really really important to get good legal advice before a bankruptcy is filed. Again assuming that the divorce is not a sham, under Oregon Law each person that owns a house that is their primary residence can exempt up to $40,000.00 of the house which means that they don't have to give the money to their creditors. You didn't say if you expect to sell the house for a profit of not. So assuming that you have some equity in the house, this means, if your husband moves back in the house or is already living there before the bankruptcy is filed, the bankruptcy court will not be interested in the house if the projected proceeds from the sale won't exceed $80,000 plus the cost of the sales. (I think this is right - that each person gets the full $40,000.00 exemption for a combined total of $80,000 but I would want to verify that this is correct where there are joint owners in one piece of property.) The $80,000 plus costs would be the threshold test in a Chapter 7 bankruptcy. The amount that they would allow before wanting money from the house might be higher if your husband files a chapter 13. If the bankruptcy trustee projects a higher margin of profit then this break even level, the trustee will push the sale forward and divide the profits with you 50:50, your husband's share going to the bankruptcy estate for distribution to the creditors and your 50% going to you since you are not involved in the bankruptcy. Selling a house during a bankruptcy is generally not the preferred way to go since the Trustee may want to sell the house quickly and may not hold out for the best sales price. Sometimes it is better to sell the house first, spend the money you get from the sale and then file bankruptcy. These are things that need to be evaluated and discussed with a bankruptcy attorney. If the bankruptcy trustee doesn't see any money to be made above the exemption by selling the house, the trustee will release the house from the bankruptcy estate and you and your ex husband will resume ownership as if the bankruptcy never happened and be free to sell or keep the house. (Note that for a married couple the exemption is only $50,000 total so if the court questions the divorce the exemption may be $50,000 total rather than two combined amounts of $40,000 for a total of $80,000 - this is an area that should be researched before proceeding.) Another issue is whether the house is properly in your joint names. Care needs to be taken before the bankruptcy is filed to make sure that the house is currently held jointly as you believe. It would really be a disaster if the house was in your husband's name only. Assuming the divorce was not a sham, if the decree properly states how the house is awarded and correctly recites the legal description of the property this is sufficient to vest the property jointly. In addition to your 1/2 interest in the house which the bankruptcy court won't touch provided that it is properly vested, you will be entitled to priority in getting paid any child support of spousal support owed out of any funds that come from your ex-husband's bankruptcy estate. This means the trustee will send you a check before paying any creditors. This is a very tricky area and there are hazards that I may not have touched on. Do not rely on the responses in this forum for legal advice. This is one area that you absolutely need to go and talk to a local bankruptcy attorney for advice and you need to do it before the bankruptcy is filed.

Dear Questioner, Yes, you need to talk to a bankruptcy attorney. We need more facts for this question, and can't give you a good answer online. For example, is your name on the deed of trust for the home? By "awaiting sale" do you mean short-sale or auction (foreclosure)? Is there positive equity in the house? You say you're selling, but do you really want to keep the home? Does your ex intend to reaffirm (agree to keep paying) the debt so that he can keep his full interest in the proceeds of the sale? If your ex does NOT intend to reaffirm, then any interest he has in excess of the homestead exemption transfers to the US Bankruptcy Trustee. (for the more technical folks following along, this puts us in 11 USC 363). The Trustee's job is to take assets and disperse them to creditors. The fact that you're already selling your home makes his job a great deal easier -- he'll just wait until it's sold, and take your husband's share. He'll likely send you a detailed letter about it. Meanwhile, if you are a joint home owner and obligated to pay the note, his bankruptcy could leave you holding the obligation for the entire mortgage. Your bank/mortgage holder is not likely to attempt to foreclose when there is still one person obligated to make loan payments (and the payments are being made). The mortgage you signed probably specifies that if one person defaults, the other becomes responsible for all payments. Your husband, at this point, has NO interest in the property (other than potentially the homestead exemption that the Trustee will pay him from his portion of the sale, if there are sufficient funds). He failed to reaffirm. It will take a separate action to record the trust deed without his name on it. If he's living with you and you want him to not be living with you, you now have options. You should take your mortgage documents to an attorney to see what happens in the event of default by one of the two signing parties (being you and your ex). This might cost you $200. Your ex's bankruptcy attorney is probably all over it, but just remember: your ex's interests may conflict with yours in the sale of the house -- don't talk to you ex's attorney about this. Get your own. Likewise, the Trustee is not your attorney -- if you want to keep the house, his interests could be adverse to yours. Because you're already selling the house, the significant change is that you will probably be responsible for the entire mortgage payment until it sells. If you want to keep the house, you may be able to do it even if your ex does not reaffirm the debt. You'll need to consult with a bankruptcy attorney in some detail, if that's the case. So, in sum: This all depends a great deal on the financial situation of your house and your mortgage contract and whether your ex intends to reaffirm. Get a full legal consult offline. Take care, -Matthew