Protecting equity in foreign real estate property

[sbotezatu]

Hello!!!
I am considering filing Chapter 7 in the Southern District of New York. I own 50% of a mortgaged residential property in Romania, and my non-filing wife owns the other 50%. After deducting the mortgage and realistic selling costs, my estimated net share may be approximately $35,000, maybe a little more. Which exemption system would likely apply, can it protect equity in foreign real property, and could a Chapter 7 trustee sell the entire property despite my wife’s 50% interest?
thank you !!!!!!

[justbroke]

Welcome to BKForum. If you are domiciled in NY state then you will use the NY exemptions. You will need a NY licensed bankruptcy attorney to review NY exemption law on whether the NY homestead exemption could protect the property not located in NY. That property must also be your primary residence to qualify as a homestead; this will be your biggest hurdle. The Trustee and schedules do not look at the "realistic" selling costs when determining equity. That means your equity is much greater than $35K.

A Trustee steps into your shoes and can do anything that you can do. That includes selling your interest in the property. However, this can get complex with international law. I don't know how property law works in Romania. A Trustee would be subject to Romanian law as far as the ownership in the property.

I would say that this is outside the scope of an ordinary conversation about exemptions. You really need a NY bankruptcy attorney to answer whether (a) you could claim the property to be your primary residence, (b) whether NY homestead laws would then protect a non-NY property, and (c) if not, will any exemption cover the debtor's share of the gross value (before costs to sell). A lot will come down to whether the Chapter 7 Trustee is willing to sell a property in Romania combined with the effects of Romanian law.