What happens to a rental house owned by sisters, if the house is paid for and one of the sisters files for bankruptcy?
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What happens to a rental house owned by sisters, if the house is paid for and one of the sisters files for bankruptcy?
Asked on October 6, 2012 under Bankruptcy Law, Tennessee
Answers:
David Axinn / David M Axinn
Answered 11 years ago | Contributor
There are several possibilities. Persons who file a chapter 7 bankruptcy are allowed to keep a certain amount of property, and if she is able to claim an exemption for it, she may still continue as an owner. If she cannot exempt it, the bankruptcy trustee will own her interest in the property, and usually would try to sell it in order to pay her creditors.
If she filed a chapter 13 bankruptcy (a payment plan), she may choose to keep the property.
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