Posted by JohnBoy on February 08, 2005 at 13:03:13:
What is around a year ago? Has been at least a year, over a year, or less than a year?
The BK court can look back as much as 4 years, but in most cases they only look back a year.
The documents you signed are not automatically null & void! Her attorney is full of BS! It will all come down to what the BK court decides to do about the transfer. This will depend on the amount of equity that was in the property. If a lot of equity was involved then the court may decide to recind the sale. If not, they may do nothing.
As far as the property going into BK, this not exactly the case. The debtor no longer owns the property. YOU DO! What is going into the BK is the debt the seller owes on the mortgage. The seller is claiming the mortgage and note she owes on in the BK so she can have that discharged and not remain liable for the loan any longer. This means the lender will find out about the transfer and the lender may choose to call the loan due. This just means you may have to refinance to pay off the existing mortgage.
When you purchased the property what was the amount owed on the mortgage at that time? What did you pay to bring it current? What was the property worth at that time? What is the homestead exemption allowed for that state?
The answers to these questions will determine how much equity was involved at the time of the sale. Depending on how much equity was involved will determine how likely the BK court would want to mess with recinding the sale.
If there was little to no equity to speak of at the time of the sale then it is unlikely the BK court would want to mess with recinding the sale. Then your only problem will be what the lender will choose to do. The seller’s liability on the loan will be discharged in the BK. Which means the lender will have a mortgage on a property that no one is legally liable for. Their mortgage will still remain as secured mortgage against the property. They just wouldn’t have any recourse against anyone to go after any deficiency amount if they ever had to foreclose. So the lender could call the loan due, or they could just require you to come in and sign on the loan to take personally liability, or just refinance you, or you would just need to refinance yourself to pay them off.
So what was the property worth when you purchased it? What was owed on it? What did you pay to bring everything current? What is the homestead exemption allowed in that state?