If you have a property which is under two names and one of the two people is planning to file bankruptcy Will the bank take the property away? Should you wait until the person who is bankrupt obtains the bankruptcy discharge to sell the property? The bank will only take the house away or the property if you are behind in the mortgage payments. The big question is: Does the property have equity? To determine the equity we need to know the value of the property and the balance of the mortgage outstanding In most cases, the bankrupt person can negotiate with the trustee to keep the house By continuing to make the mortgage payments and paying equity in the house to the trustee who will distribute those funds to the creditors It is usually better to wait until after a person is discharged to sell a house. If a buyer finds out the vendor is bankrupt this results in a lower offer as the buyer thinks the vendor is desperate to sell www.rumanek.com