Sometimes, and sadly more frequently over the past few years, family lawyers are asked , “if I divorce my wife, can the family home be saved from the trustee in bankruptcy?” The family home is not a protected asset under the Bankruptcy Act. The trustee must look at the home as an asset and if there is equity, after paying the mortgagee and the selling costs the trustee must realize the asset.
Most family homes are held jointly between the husband and wife. This is automatically severed upon bankruptcy of any one of the joint tenants and then the trustee in bankruptcy becomes a tenant in common with the non bankrupt spouse.
Usually the trustee will give the other co-owner the opportunity to buy the interest or ask the other co-owner to assist in the sale process.