When you own property jointly with somebody else, can the trustee sell the property out from under the co-owners? The short answer to that question is yes the trustee can.

The trustee has the power under the Bankruptcy Code to sell property free and clear of the interest of a co-owner in that property. As long as the trustee turns the net proceeds in that property over to the co-owner, the trustee has the right to sell it free and clear. First though, the trustee needs to file what’s called an adversary proceeding in the bankruptcy court which is a law suit asking the trustee for permission to do it. And the trustee needs to establish that it’s easier, better, and more feasible to sell the property out from under the co-owner than any of the other ways that the trustee might be able to get value for the estate’s interest in that property.

If you’re concerned about the trustee being able to sell property owned by you and a co-owner, please pick up the phone and call me at 410-484-9000.