Tenants in Common & Bankruptcy

Written by brock cooper
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Tenants in Common & Bankruptcy
Tenants in common can lose their home if one declares bankruptcy. (home sweet home image by .shock from Fotolia.com)

Bankruptcy is a difficult decision that should only be considered as a last resort and, in the case of tenants in common, it can have an effect other people as well.

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Definition

Tenants in common is a way for multiple people to be owners of a single deed. For example, if four people wanted to move into a single home and share ownership,they could become tenants in common and either two, three or all four can be on the deed.

Bankruptcy

If one of the tenants in common files for bankruptcy protection, all of his assets will be evaluated by the courts to repay debts, including the home. Many states allow for property exemptions, and the courts may conclude the home is exempt.

Effects

If the home is not considered exempt, then the courts can force the sale of the home and seize the bankruptcy filer's share. Most likely, the court will offer the other tenants in common the opportunity to purchase the filer's share prior to selling the home.

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