Expert: Terry Leeders - 12/5/2007

Question
Hi,
  I'm currently thinking about filing for bankruptcy. I owe on a line of credit from my business that went under. Im a co signer on the loan. The loan is for 50,000. I ocurred this debt before i was married and recently purchased a home with both me and my husband on the mortgage. He will not be filing. Can they take my home if the equity is over the state maximum even though it is my husbands property as well and he is not filing ? We live in NJ. Thank You in advance

Answer
In bankruptcy, the court will look at the household income from all sources to calculate if you are able to file chapter 7 to eliminate your debt.  Any assets that you have, might be liquidated if you do not have enough exemptions to cover them. Consult a NJ attorney to advise you of the available homestead exemption to protect your home.  YOu have only 1/2 interest in the home, so you only have 1/2 the equity after costs of sale, paying mortgage etc.  If you have enough homestead exemption to protect the home,then it will not be liquidated in the BK.  Otherwise, if the biz loan is unsecured, then it would be dischargeable in the bankruptcy.  If you have too much equity, you can do a chapter 13 to pay back a portion of the debts so you can protect your assets otherwise.