How will removing my name from the deed affect my bankruptcy? 12 Answers as of July 12, 2013

I signed to remove my name from the deed of the house I purchased with my father. It's my parents home and a few years ago, my widow father and I refinanced the home together. In the last two years I have been laid off twice after maintaining employment for 17 years. Can you tell me how this will impact filing for bankruptcy?

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Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
"Removing your name from the deed" and then filing bankruptcy is a BAD IDEA. It must be reported in the Statement of Affairs if it is done within two years of the bankruptcy filing. Failure to do so is bankruptcy fraud - a felony. It can cause you to lose your homestead exemption and can get your father sued if you transferred your interest in the property to him without receiving fair market value payment for your interest. Here is a better idea: Call me for a free consultation.
Answer Applies to: California
Replied: 5/17/2011
Benson Law Firm
Benson Law Firm | David Benson
Assuming you signed the most current mortgage note(s), you will remain obligated despite your name not appearing on the deed.
Answer Applies to: Ohio
Replied: 7/12/2013
Indianapolis Bankruptcy Law Office of Eric C. Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
Be very careful in this area. The answer will depend in part on the law of your particular state with regard to fraudulent transfers, but the bankruptcy Trustee can basically reverse the removal of your name and take an interest in the property if it has been done within 2 years, and in some states, longer.
Answer Applies to: Indiana
Replied: 3/30/2011
Gus Johnson Attorney at Law
Gus Johnson Attorney at Law | Gus Johnson
I recommend that you consult with an attorney in your state.
Answer Applies to: South Dakota
Replied: 3/29/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
In this case you should seek the counsel of an attorney. If you have removed your name from the property and did not receive any value, you may be looking at a challenge for fraud. The Bankruptcy Court will look at all transfers of property within the last year to friends and family and may seek to recover that property to pay your creditors. It depends on the circumstances surrounding the transfer.
Answer Applies to: New Hampshire
Replied: 3/30/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    It could cause your bankruptcy to be turned down. The bankruptcy court could take the house away from your father. If you don't tell the court about it, there's a very small chance you could go to jail.
    Answer Applies to: Virginia
    Replied: 3/28/2011
    Law Office of Eric Ridley
    Law Office of Eric Ridley | Eric Ridley
    A bankruptcy court can undo transfers which are not to the benefit of your creditors. Also, removing your name from the deed does not remove your responsibility for the financing. In other words, it is possible, depending on a number of factors, that the lender may be able to foreclose on the property if the payments are not made in a timely manner throughout the bankruptcy proceeding. Alternatively, you may be able to continue making payments through the BK process, and reaffirm the loan debt once you're through the process - again, depending on a number of factors. I don't know what state you're in, but that will affect the results as well. You should check with a bankruptcy attorney in your state.
    Answer Applies to: California
    Replied: 3/28/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Did you put money into the house? If so you have an ownership interest in it. If you did not put any money into it, you had what we call "bare legal title" or put another way you held title subject to a "resulting trust." This would not affect your bankruptcy but you should disclose all of the details. If you put money into the house you had a true ownership interest in it. You should consult an attorney about this because there are exemptions you can claim.
    Answer Applies to: California
    Replied: 3/28/2011
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    Receiving relief under the Bankruptcy Laws depends on your honesty. If you do something prior to filing a bankruptcy case, there should be a good reason to do it. For example, if your father needed you to get off the title to be able to obtain refinancing AND the property has no equity, there shouldn't be a problem so long as you disclose the transaction in your bankruptcy petition. If there is equity in the property, it might be best for you to unwind the transaction removing your name or otherwise restore the status of the title before you "signed to remove" your name from the deed of the house because the exemption laws require you to be the legal owner of property before you can invoke them - in other words, you can invoke the laws to exempt your property, but once you transfer your property to someone else, you cannot invoke the laws to protect that third party's property. Of course, there are too many variables in this equation for me to give you complete advice without meeting with you to get more information. Call us to set up an appointment for a free consultation.
    Answer Applies to: California
    Replied: 3/28/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    I'm not clear on when your name was removed from the deed. For sure if it occurred within the past 2 years, you will need to disclose that on your bankruptcy papers and depending on the equity value of your interest in the property at the time your interest was transferred, the Trustee (if you file a Chapter 7 case) can sue the transferee(s) (which I'm assuming are your parents) for the value transferred. State law statutes of limitations for fraudulent transfers may be longer than the 2 year period I mentioned, so you'll need to check with an attorney in that state for more information.
    Answer Applies to: California
    Replied: 3/28/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    You will have to report the transfer of your interest in the property to your father and if there was equity in the house that belonged to you then the trustee can set aside the transfer and sell the house and give your father his share of the equity and keep your share of the equity to pay your creditors. You should not have transferred the property without first discussing it with a bankruptcy attorney. You should discuss it now with a bankruptcy attorney to see if the transfer can be undone if necessary and if you would have enough exemptions to protect your share of the equity in the house. Transferring property is very dangerous. It is easy to sign a deed but the consequences of doing that are very serious. If the amount owed the bank on the property is more than the value of the property then it should be no problem that you transferred your interest since you had no equity but the problem will be if the mortgage balance is less than the value of the house because by transferring your share of the property you gave away your equity in the property. You might want to argue that you really had no interest in the property since you only held legal title and it was really owed by your father. The problem is that proving that may be difficult and you are taking the risk that the trustee in bankruptcy will go after the house. Again, make sure you go to a local bankruptcy attorney to discuss your case and that you obtain legal representation.
    Answer Applies to: California
    Replied: 3/28/2011
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    You really need to sit down and talk it over with a bankruptcy lawyer. Most attorneys do free consultations. Your name is still on the mortgage, so if you bankrupt it they will go after your father. Hopefully he can maintain the payments. Have you tried to let him refinance himself.
    Answer Applies to: Alabama
    Replied: 3/28/2011
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