What can be done on a deed in lieu after bankruptcy discharge? 5 Answers as of April 01, 2014

After two years of obtaining bankruptcy discharge and not living in my house anymore, some squatters tried to live there so when a neighbor offered to have the property conveyed to her, I agreed through a power of attorney (because I work in another city). Now, the property title was transferred to her son. When my friend broker who have been trying to short sale it learned about it, he said by executing that deed I am in effect taking back responsibility for all my debts and my discharge might be revoked. I am confused.

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Stephens Gourley & Bywater | David A. Stephens
A deed in lieu does not reinstate your liability for the debts or otherwise affect your discharge. However, I doubt the bank will accept a deed in lieu if you no longer own the property.
Answer Applies to: Nevada
Replied: 4/1/2014
James T. Weiner & Associates, P.C.
James T. Weiner & Associates, P.C. | James T. Weiner
I think your broker is wrong.. and your legal terminology is wrong also.. . First if you were discharged in bankruptcy personally on the debt... the only thing that could happen is when you stopped paying them mortgage the mortgage company could foreclose and take the house. SO.. there was no reason for attempting a short sale.. you could simply have walked away without personal liability. A deed in lieu of is a way of giving the house back to the mortgage company.. (its in lieu of foreclosure) you do a quit claim deed to the mortgage company Assuming you did not walk away and you gave the neighbor a quit claim deed.. which went to the neighbor's son, he could take possession subject to the mortgage... I believe that none of that would reverse your discharge pursuant to bankruptcy. Now if the neighbor using your POA executed a warranty deed to her son.. you could have warranted to the son that you held title. that could cause new liability to the son but should not revive your old discharged debts.
Answer Applies to: Michigan
Replied: 3/31/2014
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
Your discharge wont be revoked. If title is not in your name then the house becomes their problem since you were discharged of the debt during your bankruptcy.
Answer Applies to: New York
Replied: 3/31/2014
Meister & McCracken Law Firm, PLLC | Joanne M. McCracken
The best thing you can do is speak with your bankruptcy attorney. Although the creditor may not have foreclosed, it still has a lien on the property and could foreclose if it chose. You really should talk with your attorney before any further complications occur.
Answer Applies to: Arkansas
Replied: 3/31/2014
Edelman, Combs, Latturner & Goodwin, LLC | Daniel A. Edelman
I do not believe that you assume liability for any discharged debt. The transfer may be subject to any mortgage or lien on the property.
Answer Applies to: Illinois
Replied: 3/31/2014
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