Legal Question in Real Estate Law in California

I would say that the bankruptcy would affect both of you. The loan is a debt, and you are a codebtor. I imagine she is also on title to the property, which would make at least her share part of the bankruptcy estate. Depending on what chapter she files, the loan payments may become part of a bankruptcy rehabilitation plan.

I suggest you repost this in the bankruptcy law category so that bankruptcy attorneys who specialize in this area can give you more details as to the ramifications of this.

Mr. Roach's advice is good. Before conceding that she is a co-owner, however, the question must be asked "Who put up the down-payment cash?" If the contributions to the down payment were not the same percentage as the recorded ownership percentages, there is an equitable theory that the ownership percentages must be adjusted to reflect participation in making the down payment. This is called a "purchase-money resulting trust". Stated differently, if you put up 90% of the down payment but took title as a co-equal tenant in common with 50% of ownership of record, upon petition a court can order an adjustment to give you 90% of record ownership unless the other party can prove you intended to give her a gift.