Legal Question in Bankruptcy in California

My wife is filling Bankruptcy, we are in divorce, would they take the house away

my wife and I own a s class corporation, which she is the president and she has all the stocks issued to her name. She is 100% in control of the corporation now. under california law, that corporation is a community property, and I own half of that corporation. We also own a house, that I have been living in and its under 100% control of me, the title of the house, is under both my wife and I as a joint ownership. we have been in divorce for the past 3 years, and have been living seperatly. she called me last week, and said she is filling for bankrupcy and since she has given personal garntees to her lenders, and after she files for bankrupcy, they will force a sell of the house, and all we can save is 50,000 dollars for both of us, that means 25,000 dollars each. at the time of the seperation, the corporation was worth alot of money, alot more then the equity of the house, and I have paid mortgage for the past 3 years, plus insurance, and maintians of the house. tell me what is the law ? is she right ? they can force a sell of the house ? if so, how much would I get ? what happens to all the payments and the expenses I have paid for this house for the past 3 years ? what are my right ???

Thank you

--name removed--


Asked on 10/02/00, 1:22 pm

2 Answers from Attorneys
Mark Markus Law Office of Mark J. Markus

Re: My wife is filling Bankruptcy, we are in divorce, would they take the house

Yes, the Trustee can force the sale of the house in a bankruptcy. As to what amounts you are ultimately entitled to, that is a question of state community property law to which your divorce attorney can answer much better than I. You should make sure to monitor her bankruptcy closely and make sure you get put on the "special notice" list so that you receive any notices of motions to sell the property so you can assert your rights at that time.

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Answered on 10/31/00, 12:23 pm
Shai Oved The Law Offices of Shai Oved

Re: My wife is filling Bankruptcy, we are in divorce, would they take the house

You have asked some good questions which will depend on more facts. The Trustee may decide to sell the house (but than depends on the equity in the home, which exemptions your ex-spouse took, etc.). You too are entitled to claim a homestead exemption or object to your ex-spouse's set of exemptions.

It sounds like this will be a case where the trustee will administer certain assets. You can expect the Trustee to try to take charge. If the divorce has not been completed, you can take initiative by filing a motion for relief from the automatic stay to ask the bankruptcy court to allow the family law court to continue with the divorce (and classify assets) subject to the bankruptcy court's approval.

You should speak with a bankruptcy attorney as soon as possible. If you do not have one, you can call my office at (818) 992-6588. Good luck.

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Answered on 10/31/00, 12:33 pm


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