QUESTION
How could I protect my real estate assets if my business partner files bankruptcy?
Asked on Jun 29th, 2015 on Bankruptcy - Colorado
More details to this question:
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?
6 ANSWERS
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!
Answered on Jun 30th, 2015 at 11:59 AM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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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.
Answered on Jun 30th, 2015 at 10:42 AM
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.
Answered on Jun 30th, 2015 at 10:25 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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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.
Answered on Jun 30th, 2015 at 4:13 AM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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The transfer would be fraudulent and pursued by creditors as well as a chapter 7 Trustee if you file for bankruptcy.
Answered on Jun 29th, 2015 at 8:53 PM
Deborah F. 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.
Answered on Jun 29th, 2015 at 5:26 PM