Facing Foreclosure, Co-Owner Of Property Filed Chapter 7 Bankruptcy - How Do I Sell?

[grygorius]

Hi,

I'm in Nevada facing a legal issue regarding foreclosure.

Background: Purchased residence before being married to the co-owner (A). After 5 months of ownership, marriage decreed a divorce (joint), and house goes on market. Verbal agreement etween owners was to pay 50/50 on mortgage until residence was sold, and debt/profit split 50/50 upon sale (per divorce decree). 1 year has passed w/ no sale, and one co-owner refuses to pay half-mortgage, files BK, Ch 7 and refuses to sign on offer(s) that are coming in on the residence (all within 6 days). Co-owner (A) says upon advice from her BK lawyer, she will not approve offers or Quitclaim Deed the property.

It was verbally agreed-upon to keep the house up-to-date until Jan 08, and then not pay (foreclosure starting), if house was not sold. However, the BK filing occured before the agreed upon Jan month for not paying anymore.

My question is: How can I stop the BK from interfering with the sale of the house? Co-owner A is aware of the new bill HR3648 that relieves mortgage debt from sales where a 1099 is generated [from a short-sale] to forgive federal taxation on the "profit", but the BK is filed already.

I know that either filed or discharged the BK court has to approve the sale of the asset/property, but my challenge is selling the house now to avoid my going into foreclosure.

It might be worth mentioning that the mortgage bank has no history or indication that we are delinquent, but does have a bank-approved application on file for short sale, due to the distress of the divorce.

Is there a potential financial loss/implication for me if I am subject to being the only debtor liable for the mortgage?
After the BK is discharged, do I automatically get 100% control of the property (ie. get to make all the selling decisions)?
Is it a good idea to get with the bank and disclose all this information?
Is there a way to track co-owner A's BK filing/case?

Thanks for any and all help! It is much appreciated, so I can assess better my path in a short time period.

Sincerely,
Grygorius

[Mr. Knowitall]

To sell, you would need to get relief from the automatic stay resulting from bankruptcy, which would mean getting an order from the court, or get court approval for the sale. You can also explore buying out the co-owner's interest through the bankruptcy court.

[grygorius]

Thanks for your response, Mr. Knowitall.

Since "buying out" is not an option (no money), I've anticipated your response by getting many lawyers' (of specialty) opinions. I have filed a motion for the Divorce Court judge to grant me 100% interest in selling the house. According to the divorce decree, the judge's favorable decision should fulfill the intent of the decree, and this should allow her to file BK and me to sell the house without deeding the house over to me, in a reasonable amount of time.

Of course, title would still need permission from the BK court to sell, depending on state of discharge, but we'll cross that bridge when we get to it!

Thanks again for helping me make better decisions regarding my question!