transfer of home

Guest 0.10 Dollars($)

I signed a quit claim deed, transferring my home to my parents because I wasn't able to work, and I moved into my boyfriend's home. My parents have put about $10,000 into it since I quit claimed it to them. There is still a balance on the house and they took over the contract.

After divorce, I was left with a high attorney bill for divorce/custody and medical bills, totalling about $26,000 so I'd like to file Chapter 7. I was told by an attorney that no matter how innocent the action of quit claiming my house to my parents because they had been helping me out, it would look fraudulent. He said I needed to have my parents quit claim it back to me so I could file Chapter 7 and then, after the bankruptcy goes through, I could quit claim it back to them.

Although I now see how I shouldn't have done the quit claim before filing for bankruptcy, my parents refuse, saying they're afraid that somehow something will go wrong and they'll lose the house.

What do you suggest?

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.77 Dollars($)

Hello Angie,

When did you sign and record the quit claim to transfer the ownership?

If it is within a short period of time then your case might be considered as a fraud in order to keep the property away from the bankruptcy. If not, then the copy of quit claim deed itself will prove your intentions.

Have you spoken to your lender about doing a reverse quit claim to get the house in your name and then again put it back to your parents' name after the bankruptcy? I don't know how far is this logical and applicable but I think your lender will not give his consent for this.

Why are you considering bankruptcy ch 7 and not 13?

Is it because you don't have any source of income to repay the loans? Why are you not trying for a part time job or something like that? Is there a real problem behind that?

A Ch 13 could have been a better option where your house as well as other assets were protected and you could plan to repay your loans with the help of alternative repayment options.

Caron · Posted: Fri Nov 09, 2007 9:54 am Post subject: RE: lose home in chapter 7?

Hi Angie,

Welcome to our forums.

It's not that you'll lose your home if you file chapter 7 bankruptcy. It will depend more upon your state laws. If the primary home is an exempt property, then you won't lose the home as it will not be considered as an asset which can be sold off to pay your creditors or lenders. Moreover, if there is an homestead exemption on your property, then depending upon the laws in your state, you may even get a certain value of your home equity exempt from bankruptcy.

I would also like to mention here that you may have quitclaimed your property. But it's been quite some time now, isn't it? So, why would it be considered as fraudulent transfer. Rather, had you filed bankruptcy and then quitclaimed, only then it could have been considered as fraud. I think it's better if you get it cross-checked by another attorney. And, just in case you feel like checking whether you will qualify for chapter 7 or 13, go through a previous discussion on this issue.

Good luck

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