Foreclosure on a person I co-own a house with, how will this impact my half?


#1

Hi Sean, Very informative site! I co-own a house a jtwros in California. My co-owner got over his head on credit cards and got 3 liens placed on the house. The 1st credit card company is trying to foreclose the house. How do they foreclose a house where there is more than 1 owner? If an auction happens how do they determine the starting bid? In an auction how does my half get handled? Thanks in advance


#2

Check with an attorney, but I believe your half is completely at risk. If the credit card company gets court approval to foreclose they will likely start the bidding at the amount they are owed. If the winning bid is more, any excess will first go to other liens, and then to you and your co-owner jointly. I don’t believe the fact that the debts are the co-owners rather than yours will matter at all. You will just have to try to recover any losses from them after the fact.

I’d recommend you quickly find an attorney and see what option you might have. Perhaps you could buy the partner out by paying off his debts and thus removing the liens from the property. Perhaps there is a way to protect your interest that I’m not aware of. But I certainly wouldn’t wait and see what happens.


#3

Thanks Sean. I will check with an attorney.