When you file a Chapter 7 or Chapter 13 bankruptcy, you are required to complete several forms on which you must disclose all of your income, assets, and debts. One of these forms, Schedule A, requires you to list any real estate that you own, anywhere in the world. If you own property jointly, you must disclose the property, how you own it, and your share of the property's value on Schedule A.
(To learn about the other forms you must file in bankruptcy, see Completing the Bankruptcy Forms.)
Real estate includes any land that you own and buildings on that land, but may also include property such as a time share. Regardless of whether you are paying a mortgage or have lien against your property, if you have an ownership interest in any real estate, you must list it on Schedule A.
If you own property jointly with another person or entity, you must indicate that as well. This comes up in a number of situations, such as when you file bankruptcy and your spouse does not, and you own a home together. It also comes up when you own property jointly with siblings, which sometimes happens when real estate is inherited from family members, or when you co-own real estate with any person who is not your spouse.
There are several places on Schedule A where you indicate that you own property jointly. (For information on filling out Schedule A in general, see Schedule A of the Bankruptcy Forms.)
In this part of Schedule A, you must list the address or description of the property, such as “1234 Maple Street, Anytown PA 12345” or “Timeshare in Kissimee, FL.” When you own property with another person who isn’t filing bankruptcy with you, you should let the court know exactly what you own and how much it is worth. If you clearly describe your property on your bankruptcy documents so that the court understand exactly what you own, you are likely to have less to explain at your hearing.
Here are two examples of how you might do this.
Example 1. 1234 Maple Street, Anytown, PA 12345 $60,000 (jointly owned with non-filing spouse) (50% interest)
Example 2. 1234 Maple Street, Anytown, PA 12345 $60,000 (jointly owned with non-filing spouse, total value $120,000)
This refers to the legal character of your property ownership. For example, you may hold property in “fee simple,” which essentially means you have the right to transfer it to someone else. You might own a “joint tenancy” or a “tenancy by the entirety,” depending upon the state in which the property sits and the nature of your ownership interest. Typically, you’ll find the type of ownership interest you have on the deed to the property.
This asks who owns the property, but it refers only to the person who is filing the bankruptcy. So, if you are married but your spouse isn't filing, you list the choice that refers to you alone, even if you own property jointly with your spouse. This is because Schedule A requires you to disclose your assets, and the portion that your spouse owns is not a part of your bankruptcy estate.
Example. If you are married and own property jointly with your wife, but she is not filing a joint bankruptcy with you, you list "husband," not “joint.” However, if your wife is filing for bankruptcy with you, and you owned property together, you would list “joint” or “community,” whichever is applicable.
This is where you list your share of the current market value of the property, which means how much you could sell it for in today’s market, as is. So if the property is worth $120,000, but you have a 50% interest in the property, you would list $60,000. (Learn more about valuing your real estate in bankruptcy.)