QUESTION
My name was removed from a deed about a year ago. Can I still file chapter 7. Will there be a negative impact?
Asked on Sep 12th, 2012 on Bankruptcy - Massachusetts
More details to this question:
A family member had put my name on the deed to her property. I asked to be removed from the deed because it was preventing me from filing chpter 7. If I file now, a year later, will my petition be negatively impacted?
1 ANSWER
Bankruptcy Attorney serving Burbank, CA
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Law Office of Mark J. Markus
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You have to disclose any transfers of property made within 2 years prior to filing your bankruptcy case, so being "removed" from title 1 year ago would require it to be included in your Chapter 7 petition and the transfer is subject to being recovered by the Trustee in your case. It is also a potential basis for denial of your discharge depending on the value of your interest in the property that you "removed."
This is textbook fraudulent transfer in that you gave up ownership of an asset and received less than "reasonably equivalent value" for it. Your family member can try to argue that you only had legal title, but not equitable title, and that might work, but it's going to require proof and it's going to get complicated.
Even after 2 years it's not an automatic solution to your problem, since many states have statutes of limitation longer than 2 years for fraudulent transfers and the Trustee in your case can use the state law to go after the transferee (family member).
A lot of this depends on the amounts involved and other considerations, so you should check with a bankruptcy attorney in your area for more details.
Mark J. Markus, Attorney at LawCertified Bankruptcy Law Specialist--State Bar of California Board of Legal SpecializationHandling exclusively bankruptcy law cases in California since 1991.http://www.bklaw.com/bankruptcy blog: http://www.bklaw.com/bankruptcy-blog/Follow Me on Twitter: @bklawr
Answered on Sep 12th, 2012 at 4:35 PM