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Spouse Declared Bankruptcy With Divorce Pending

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  • 04-17-2010, 11:55 AM
    Sdakota
    Spouse Declared Bankruptcy With Divorce Pending
    My question involves bankruptcy in the state of: South Dakota

    my husband filed chapter 7 three weeks before divorce trial. We are tenants in common in the home that I live in. I made the $75,000 down payment before the marriage. The mortgage loan is in my name only. Less than $75,000 equity in home now.
    Adversary proceeding and Judge says we can only show testimony of what we "think" the house will sell at at the trial and then he will decide whether to believe trustee or me.

    I did 8 pages of discovery listing monetary detriment to me but evidently that is not going to be considered, only what each of us "thinks" the house will sell for. (judge says that since no one can predict the sale price that it will have to be sold)

    We filed counterclaim constructive trust because he had his name put on the deed without my knowledge. Court says doesn't matter, equity is 50/50. Does law require BR judge to take into consideration the greater amount that I invested or does he get to say 50/50?

    Does the trustee have to show the court where his half of proceeds will go (ie his and attorney fees and THEN to creditors-which eats up 90% of the profit) At what dollar amount does the judge say the detriment is greater to me?

    Also, if they auction it do I get the first right of refusal at the auction price by just paying the trustee off, or do I loose all rights to retain my home and have to accept whatever few dollars I am paid?
  • 04-19-2010, 11:01 AM
    Mr. Knowitall
    Re: Spouse Declared Bankruptcy With Divorce Pending
    Is the issue here that you're trying to buy the house from the bankrupt estate and hope that the trustee's estimate is low, or that you're trying to establish as much equity as possible and are hoping for a high estimate? Submitting appraisals to a court to help establish the value of real estate is quite routine.

    I don't know anything about when or how the house was purchased or the length of the marriage, so I'm not positioned to guess whether the judge is being reasonable in holding that the home has merged into the marital estate despite your greater initial contribution.

    You have a divorce pending, so you should be able to discuss these issues with your divorce lawyer.
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