Legal Question in Bankruptcy in Maine
Equity in Joint Tenancy
How is it possible to determine an individual's equity in real property when two or more people are joint tenants? My understanding of joint tenancy is that, say, in a case where three people are joint tenants, they don't each own one-third of the property but all three own all of it jointly. If two of these three people were to declare bankruptcy, how would their equity in the property be determined? Could the third party lose their share in the property even though this party was not part of the bankruptcy?
1 Answer from Attorneys
Real estate equity - joint tenancy
The bankruptcy court will appoint an appraiserwho should appraise both the value of thereal estate and the value of each joint tenant'sinterest therein. In all likelihood, if thereis substantial value in excess of your equityplus the interests of any mortgage holder(s),the property could be sold under a partitionorder from a civil court. You would then beentitled to a portion of the sale proceeds.
Also, you would have the opportunity to buythe entire parcel at the partition sale,probably at a premium price.
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