How could I protect my real estate assets if my business partner files bankruptcy? 11 Answers as of June 30, 2015

I co-own a house as rental property with a friend with no mortgages. The title is clear under both of our names, and my proportion is 21%. Now all my friend’s houses went into foreclosure. (She hasn't filed bankruptcy yet) We didn't form any business entity, but she agrees to write a partnership agreement, and she wants to transfer her title under someone else's name in order to protect our house. Would the creditor still be able to claim the house even if it is paid already? If so, how would this affect our co-ownership? How can I protect my asset? What needs be included in our contract? Would it be any different if I am an alien?

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Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
What she is proposing to do is bankruptcy fraud. Do not participate in that. Worst case the trustee sells the house and gives you you 21%. Should she file you need competent counsel. You may find one at nacba.org. Transfers are public record.
Answer Applies to: California
Replied: 6/30/2015
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
Your case is much too complicated to answer here. Pay an experienced BK & RE lawyer for two hours of his or her time to review the situation with you. You have too much at stake to skimp now. Good luck!
Answer Applies to: Colorado
Replied: 6/30/2015
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
You can not change owner ship now for a chapter 7 bankruptcy. The trustee will look back at the last 6 years of real estate they owned and unravel the transfer as fraud. You should really see a local attorney as your case may be complicated.
Answer Applies to: New York
Replied: 6/30/2015
R. Steven Chambers PLLC | R. Steven Chambers PLLC
The trustee can sell the property. If he does, he will have to pay you your 21% interest. Alternatively he will probably give you the option of buying her 79% interest from him. Her plan to transfer her title to someone else is potentially bankruptcy fraud for which she can go to prison. You should not take any part in that transfer unless it is for market value, i.e., whoever gets the property pays fair market value for it.
Answer Applies to: Utah
Replied: 6/30/2015
Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
Your citizenship status is irrelevant to this problem. First things first though: you should retain a skilled bankruptcy lawyer without delay. He or she can guide you on ways to avoid the clear trouble which it appears your friend is about to get into, and get you into. Almost any transfer of property just before a BR looks fishy to the court, and many of them are fishy. Don't let it happen to you. There are ways to protect your investment without violating any laws, but a lawyer needs to know all the details. Good Luck.
Answer Applies to: Wisconsin
Replied: 6/30/2015
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    Any transfer of any kind of asset from your partner to you will be presumed to be fraudulent. Whatever the value of the property is, is it worth it for either or both of you to face criminal charges? You both ought to be meeting with separate lawyers for your own protection for a not free consultation.
    Answer Applies to: Nevada
    Replied: 6/30/2015
    Ronald K. Nims LLC | Ronald K. Nims
    If you own a house as tenants in common (meaning both your names are on the deed and your not married), then your friend's interest in the house can be taken by the bankruptcy court to pay her creditors. Houses can't be split, so the court would require the house to be sold and you would receive 21% of the proceeds - which would be bad because bankruptcy sales tend to be for less than market value. Transferring ownership to another name at this point wouldn't help, the bankruptcy court can void transfers within two years of filing. You should have put the house in an LLC when you first bought it, then you'd be protected against this. It doesn't make any difference if you're an alien.
    Answer Applies to: Ohio
    Replied: 6/30/2015
    Stephens Gourley & Bywater | David A. Stephens
    If she transfers the house without receiving a fair consideration, the creditors or trustee could pursue her interest in the house.
    Answer Applies to: Nevada
    Replied: 6/29/2015
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    The transfer would be fraudulent and pursued by creditors as well as a chapter 7 Trustee if you file for bankruptcy.
    Answer Applies to: Michigan
    Replied: 6/29/2015
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    Your friend really needs to spend some time and money with a knowledgeable and experienced bankruptcy lawyer before taking any action. You may also want to obtain separate legal advice, because what is in your best interest may be different than what is in her best interest.
    Answer Applies to: Colorado
    Replied: 6/29/2015
    Law Office of Barry R. Levine | Barry R. Levine, Esq.
    Make an appointment to speak with an experienced bankruptcy attorney to daze . . . do not do anything with speaking to a qualified attorney.
    Answer Applies to: Massachusetts
    Replied: 6/29/2015
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