Posted on: 09th Mar, 2009 07:32 pm
me and my best friend bought a home in florida in 2004. the home deed is joint tenants with full rights of survivorship. home cost was $225,000. i mortgaged $140,000 he paid cash of $85,000. i am the only borrower on the note. a gift letter was used for his amount of $85,000 stating these funds will be given to me prior to the closing of the mortgage transaction on the purchase of the home.
i also took out a home equity loan in 2007 for $116,000 with his agreement and am the only borrower on this note. this has been my primary residence since 2004, he lives in kansas.
my financial situation has deteriorated and i have no income coming in now or in the foreseeable future. i plan on filing for a chapter 7 bankruptcy within the next 2 weeks with the advice of a bankruptcy attorney (mortgage & credit card debt). as of 3 days ago, the first late payment has occurred with the 2nd mortgage (not 30 days yet though) and first late payment on the first mortgage will be on 3/16/09.
the combined balance of my 2 notes is $242,000 and the fmv of the house is around $200,000. we plan to surrender the property as part of the bankruptcy.
1. is their any liability concerning the notes that can come back on the co-owner?
2. what will the note holders require of the co-owner concerning the deed ownership being joint?
3. any irs implications for the co-owner concerning capital gains or loss?
with gratitude for your assistance.
bob
i also took out a home equity loan in 2007 for $116,000 with his agreement and am the only borrower on this note. this has been my primary residence since 2004, he lives in kansas.
my financial situation has deteriorated and i have no income coming in now or in the foreseeable future. i plan on filing for a chapter 7 bankruptcy within the next 2 weeks with the advice of a bankruptcy attorney (mortgage & credit card debt). as of 3 days ago, the first late payment has occurred with the 2nd mortgage (not 30 days yet though) and first late payment on the first mortgage will be on 3/16/09.
the combined balance of my 2 notes is $242,000 and the fmv of the house is around $200,000. we plan to surrender the property as part of the bankruptcy.
1. is their any liability concerning the notes that can come back on the co-owner?
2. what will the note holders require of the co-owner concerning the deed ownership being joint?
3. any irs implications for the co-owner concerning capital gains or loss?
with gratitude for your assistance.
bob
hi bsgreek
as the co-owner of the property does not have joint debts with you, he will not be affected due to your filing bankruptcy. however, you should note that the bankruptcy trustee can consider the property as your asset and can sell it off to pay off your creditors. so, the co-owner will lose the property.
if there are gains from the selling of the property, then you and your co-owner will have to pay taxes on it. in case, if you have incurred a capital loss, then you can offset the loss against $3000 (on a yearly basis) of your ordinary income (for married couples who are filing separately, it is $1500). this will reduce the taxable income. but if the loss is higher than $3000, then you can carry it over to offset against another $3000 of your income in the next year.
thanks.
as the co-owner of the property does not have joint debts with you, he will not be affected due to your filing bankruptcy. however, you should note that the bankruptcy trustee can consider the property as your asset and can sell it off to pay off your creditors. so, the co-owner will lose the property.
if there are gains from the selling of the property, then you and your co-owner will have to pay taxes on it. in case, if you have incurred a capital loss, then you can offset the loss against $3000 (on a yearly basis) of your ordinary income (for married couples who are filing separately, it is $1500). this will reduce the taxable income. but if the loss is higher than $3000, then you can carry it over to offset against another $3000 of your income in the next year.
thanks.
Hi Niicss,
Thanks for the quick reply.
Wondering how will the mortgage lender proceed concerning the co-owner's ownership as part of the deed and if he will be required to sign a motorized form relinquishing ownership? Could we just use a quick claim deed to sign over his ownership to me?
Also, the house insurance lapses 3/11/09. So am wondering if there are any potential liabilities regarding this, since there would be an interim period before the note holders would receive notice of the intent to surrender the property and thus move to insure their particular interests.
With Gratitude
Bob
Thanks for the quick reply.
Wondering how will the mortgage lender proceed concerning the co-owner's ownership as part of the deed and if he will be required to sign a motorized form relinquishing ownership? Could we just use a quick claim deed to sign over his ownership to me?
Also, the house insurance lapses 3/11/09. So am wondering if there are any potential liabilities regarding this, since there would be an interim period before the note holders would receive notice of the intent to surrender the property and thus move to insure their particular interests.
With Gratitude
Bob
I guess, when your property will be sold, the bankruptcy attorney will give the co-owner his portion of the money and the rest will be used in paying off your creditors. As far as the insurance is concerned, I think you should consult an expert in this field and take his opinion.
Trustee will not act because there is no equity (i.e. 100%) to 1st mortgage lender. Liability post sheriff sale depends upon how lender plays out their credit bid at the sale (100% credit bid = no debtor deficiency; less than 100% = debtor / gurantor liability for deficiency; lender may or may not seek them out).
My attorney said when i file for bankrupcy, under chap 7. I would need to surrender my home ./but continue to make payments to avoid forcloser. I want to keep my home. will this cause me to lose it or what
hi pcsclean,
you can save your home though you file chapter 7 bankruptcy. once your bankruptcy is discharged, you can sign a reaffirm agreement with your lender. this will make you liable for the mortgage debts. if you pay off the debts, the lender will not foreclose the property.
thanks
you can save your home though you file chapter 7 bankruptcy. once your bankruptcy is discharged, you can sign a reaffirm agreement with your lender. this will make you liable for the mortgage debts. if you pay off the debts, the lender will not foreclose the property.
thanks
Iam 3 months behind on house payments and have lots of debt
I know forecloser is coming soon if ifile chapter7
and get rid of some debt can i keep my home i have paid on it for 10 yrs and don't won't to loose it
I know forecloser is coming soon if ifile chapter7
and get rid of some debt can i keep my home i have paid on it for 10 yrs and don't won't to loose it
Hi mary,
You can file Chapter 7 and get rid of your debts. If you want to save your property, you'll have to reaffirm the mortgage and pay off the dues on time. Signing a reaffirmation agreement will once again make you personally liable for the dues. After reaffirmation, if you're unable to pay off the dues, the lender would foreclose the property.
Thanks
You can file Chapter 7 and get rid of your debts. If you want to save your property, you'll have to reaffirm the mortgage and pay off the dues on time. Signing a reaffirmation agreement will once again make you personally liable for the dues. After reaffirmation, if you're unable to pay off the dues, the lender would foreclose the property.
Thanks
Mary, if you've been paying it off for 10 years you may have some decent equity in it by now - you couls consider either reaffirming it as james mentions or even look at selling it privately prior to foreclosure.
It would certainly be a shame to lose all that work.
It would certainly be a shame to lose all that work.
ON MY 2 VEHICLES AND AN OLD BOAT 1986 I HAVE "FULL RIGHTS TO SURVIORSHIP OF MY SON'S NAME". IF I FILE BANKRUPCY CHAPTER 7 ON 2 CREDIT CARDS ONLY CAN THEY TOUCH MY 2 VEHICLES AND OLD BOAT. THIS IS HOW MY TITLES READ AS ABOVE.??
Hi BEACH,
While you file Chapter 7, you will have to list all your assets. If the properties are free and clear, the trustee may sell them off in order to pay off your creditors. In my opinion, you should file Chapter 13 in order to get the credit cards discharged or consolidate the debts with the help of a consolidation company.
While you file Chapter 7, you will have to list all your assets. If the properties are free and clear, the trustee may sell them off in order to pay off your creditors. In my opinion, you should file Chapter 13 in order to get the credit cards discharged or consolidate the debts with the help of a consolidation company.
HUSBAND AND I ARE BUYING A HOME IN CA. SELLER DECIDED TOO CARRY NOTE FOR US. OUR CREDIT SCORE WASENT HIGH ENOUGH SO FOR THE LAST THREE YEARS WE'VE BEEN PAYING MORGAGE ON TIME PLUS WE HAVE DONE MANY IMPROVEMENTS TOO THE HOUSE...SELLER BOUGHT ANOTHER HOUSE IN RENO AND HAS IMFORMED US THEY WILL BE FILING CH7 ASAP...WHAT RIGHTS DO WE HAVE...CAN WE LOSE OUR HOUSE...PLEASE HELP!
hi cpar4eer!
welcome to forums!
you are in a tough situation. you should try to refinance the existing mortgage in your name and get the property solely transferred in your name. you should even contact a real estate attorney and take his opinion in this matter.
feel free to ask if you've further queries.
sussane
welcome to forums!
you are in a tough situation. you should try to refinance the existing mortgage in your name and get the property solely transferred in your name. you should even contact a real estate attorney and take his opinion in this matter.
feel free to ask if you've further queries.
sussane