I mistakenly posted my inquiry to the chapter 7 forum but no realize this the appropriate forum for my question. Sorry about the duplicate post. Hoping someone can shine some understanding on my confusion over how the homestead exemption is applied.
I currently live in Portland, Oregon (6 years now) and will be filing bankruptcy in the next few months. About six years ago, I used my personal unsecured credit cards to help fund a failing business I inherited from my father when he died. Right after I moved up to Oregon from California, my transplanted business took a downturn. About that time I also got married in the Philippines and my wife arrived here about in 2003.
My wife and do not share finances, my credit was so bad by the time that she arrived her in the States that I did her more harm then good if I was attached to anything. Even on our taxes we submitted as married, but filing seperate.
In 2006, my wife was able to get a sweetheart deal on the house next to one we were renting. She was able to get a 222K appraised house for 150K. The inspection, title, morgage, everything is entirely in her name.
In my first consultation with a BK attorney, he was really unsure as to whether the trustee could go after the 72K in equity, 50K if you subtract realtor fees and such, that was in my wife's name. Oregon is not a community property state he told me, but the trustee might look at something called "equitable distribution". At this point he started leading away from a chapter 7 even though we said we could probably get with the means test.
After leaving this consultation, I started thinking about the math involved. If my wife and I share equitable distribution of the equity in the house... roughly 50K after closing/realtor fees, etc, I would assume my share would be around 25K. Oregon has a homestead exemption of 30K per individual. If I apply this exemption to my half, its protected I think. But what about my wife's half? By my logic, the trustee cannot go after her half.. it is not community property and she shares none of my debt since it incurred before we married. Right? Is this how homestead exemption is applied in single-filer cases where the spouse shares no debt? Or do you have to apply the joint couple homestead exemption of 39K to the equity even though the other spouse is not filing?
I've looked around and around the internet but cannot find anything close to answering my question. I have a few phone and walk-in appoints with some attorneys next week, but my wife is so stressed out they will take her beloved house.
Any information regarding how homestead exemption is applied in my case would be greatly appreciated.
Tony in Portland
I currently live in Portland, Oregon (6 years now) and will be filing bankruptcy in the next few months. About six years ago, I used my personal unsecured credit cards to help fund a failing business I inherited from my father when he died. Right after I moved up to Oregon from California, my transplanted business took a downturn. About that time I also got married in the Philippines and my wife arrived here about in 2003.
My wife and do not share finances, my credit was so bad by the time that she arrived her in the States that I did her more harm then good if I was attached to anything. Even on our taxes we submitted as married, but filing seperate.
In 2006, my wife was able to get a sweetheart deal on the house next to one we were renting. She was able to get a 222K appraised house for 150K. The inspection, title, morgage, everything is entirely in her name.
In my first consultation with a BK attorney, he was really unsure as to whether the trustee could go after the 72K in equity, 50K if you subtract realtor fees and such, that was in my wife's name. Oregon is not a community property state he told me, but the trustee might look at something called "equitable distribution". At this point he started leading away from a chapter 7 even though we said we could probably get with the means test.
After leaving this consultation, I started thinking about the math involved. If my wife and I share equitable distribution of the equity in the house... roughly 50K after closing/realtor fees, etc, I would assume my share would be around 25K. Oregon has a homestead exemption of 30K per individual. If I apply this exemption to my half, its protected I think. But what about my wife's half? By my logic, the trustee cannot go after her half.. it is not community property and she shares none of my debt since it incurred before we married. Right? Is this how homestead exemption is applied in single-filer cases where the spouse shares no debt? Or do you have to apply the joint couple homestead exemption of 39K to the equity even though the other spouse is not filing?
I've looked around and around the internet but cannot find anything close to answering my question. I have a few phone and walk-in appoints with some attorneys next week, but my wife is so stressed out they will take her beloved house.
Any information regarding how homestead exemption is applied in my case would be greatly appreciated.
Tony in Portland
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