Posted on: 09th Sep, 2007 06:53 pm
My parents own a home free and clear. Fully paid for, no mortgage, no liens etc. They have recently come into very bad financial and health situations. They are severely in debt and may have to file for bankruptcy.
If they quitclaim the house to us, will we be responsible for their debt if they file bankruptcy? If they are sued, can we be liable?
We can't help them financially but if we can at least make sure they can live in their house it will help.
Any advice on this would be much appreciated. Thank you!
If they quitclaim the house to us, will we be responsible for their debt if they file bankruptcy? If they are sued, can we be liable?
We can't help them financially but if we can at least make sure they can live in their house it will help.
Any advice on this would be much appreciated. Thank you!
Hi Lizr,
Welcome to the forum.
If your parents quitclaim the house to you prior to bankruptcy, there are chances of legal proceeding against you and that may continue up to 4 years.
Welcome to the forum.
If your parents quitclaim the house to you prior to bankruptcy, there are chances of legal proceeding against you and that may continue up to 4 years.
Thank you Larry.
How far prior to bankruptcy? I'm guessing if they file for bankruptcy it won't be for about year. My father just quit his job, but my mother works a 6 hours a day at minimum wage. They've started selling off things and will try to prevent bankruptcy for many months.
However, due to my father's health issues I don't think he'll be getting a new job anytime soon.
My husband I are just looking to the future and want to prevent what you just mentioned above.
How far prior to bankruptcy? I'm guessing if they file for bankruptcy it won't be for about year. My father just quit his job, but my mother works a 6 hours a day at minimum wage. They've started selling off things and will try to prevent bankruptcy for many months.
However, due to my father's health issues I don't think he'll be getting a new job anytime soon.
My husband I are just looking to the future and want to prevent what you just mentioned above.
hi lizr,
i actually meant to say that if your parents quitclaim the property on filing bankruptcy, then you being the grantee, may be sued continuously for 4 years.
btw, you have mentioned that your parents are in a state of severe debts. in that case, if they are 62 years of age, they may consider to take a reverse mortgage. this loan will convert their home equity into a steady flow of cash and thus will help to repay all their debts. to know more on reverse mortgage, you may refer to http://www.mortgagefit.com/reverse.html
i actually meant to say that if your parents quitclaim the property on filing bankruptcy, then you being the grantee, may be sued continuously for 4 years.
btw, you have mentioned that your parents are in a state of severe debts. in that case, if they are 62 years of age, they may consider to take a reverse mortgage. this loan will convert their home equity into a steady flow of cash and thus will help to repay all their debts. to know more on reverse mortgage, you may refer to http://www.mortgagefit.com/reverse.html
Thanks larry.
Unfortunately my parents are only 53 years of age. Unfortunately they have the spending habits of teenagers.
So it sounds like what you are saying is that if we quitclaim the house way in advance of bankruptcy, we might not be vulnerable to being sued?
Unfortunately my parents are only 53 years of age. Unfortunately they have the spending habits of teenagers.
So it sounds like what you are saying is that if we quitclaim the house way in advance of bankruptcy, we might not be vulnerable to being sued?
"My parents own a home free and clear. Fully paid for, no mortgage, no liens etc. They have recently come into very bad financial and health situations. They are severely in debt and may have to file for bankruptcy.
If they quitclaim the house to us, will we be responsible for their debt if they file bankruptcy? If they are sued, can we be liable?
We can't help them financially but if we can at least make sure they can live in their house it will help.
Any advice on this would be much appreciated. Thank you!"
Instead of filing bankruptcy why don't they look to get a mortgage/home equity loan as the house is free and clear of any previous loan?
If needed you can be included as co owner for the house & qualify for the mortgage as co borrower. It can be done if they are not in a position to qualify by themselves.
It would be certainly lot better than filing bankruptcy, which damages your credit profile.
If they quitclaim the house to us, will we be responsible for their debt if they file bankruptcy? If they are sued, can we be liable?
We can't help them financially but if we can at least make sure they can live in their house it will help.
Any advice on this would be much appreciated. Thank you!"
Instead of filing bankruptcy why don't they look to get a mortgage/home equity loan as the house is free and clear of any previous loan?
If needed you can be included as co owner for the house & qualify for the mortgage as co borrower. It can be done if they are not in a position to qualify by themselves.
It would be certainly lot better than filing bankruptcy, which damages your credit profile.