Complaint to Sell Jointly Owned Property
(11 U.S.C. § 363(h))

Summary

This complaint to sell jointly owned property template is for use by a plaintiff to commence an action to sell property free and clear of a co-owner's interest in the property pursuant to Section 363(h) of the Bankruptcy Code. This template includes practical guidance, drafting notes, and alternate and optional clauses. Section 363(h) authorizes a trustee to sell the estate's interest and the interest of the co-owner of property in which the debtor had an undivided interest as a tenant in common, joint tenant, or tenant by the entirety, if (1) partition in kind of the property among the estate and any co-owners is impracticable, (2) the estate would realize significantly less from a sale of the estate's undivided interest than from a sale of the property free of the co-owners' interests, (3) the benefit to the estate from the property's sale outweighs any detriment to the co-owners, and (4) the property "is not used in the production, transmission, or distribution, for sale, of electric energy or of natural or synthetic gas for heat, light, or power." 11 U.S.C. § 363(h). In many cases, a trustee is using Section 363(h) to sell a residence where a non-debtor spouse owns a portion of it. A trustee must commence an adversary proceeding to obtain relief under Section 363(h). Fed. R. Bankr. P. 7001(3). Adversary proceedings are separate cases that are associated with the main bankruptcy proceeding. The complaint is the first document that will be filed in the adversary proceeding. It consists of a caption page, jurisdictional and venue allegations, factual allegations, claims for relief, a demand for relief, and the signature of the attorney or his or her client. It should be well organized and readable. Part VII of the Federal Rules of Bankruptcy Procedure (Bankruptcy Rules) governs adversary proceedings and incorporates (or adapts) most of the Federal Rules of Civil Procedure (Federal Rules). For more information, see Collier on Bankruptcy P 363.08. For general information on selling assets, see Conducting Section 363 Sales, Section 363 Sale Procedures, Hearings, Orders, and Appeals, and Section 363 Asset Sales Video (Federal). For a full listing of key content when litigating disputes in bankruptcy cases, see Bankruptcy Litigation Resource Kit. For resources for attorneys representing a party in a Chapter 13 case, see Individual Chapter 13 Bankruptcy Resource Kit. For other related content, see Consumer Bankruptcy Resource Kit, Bankruptcy Issues in Residential Real Property Transactions, Consumer Bankruptcy and Divorce Law, and Adversary Proceeding Bankruptcy Rules and Federal Rules Comparison Chart. For your planning purposes, note that the defendant in a bankruptcy adversary proceeding must in general file an answer or other responsive papers within 30 days after issuance of the summons. Fed. R. Bankr. P. 7012(a)(1).