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What Happens if You're Added to a Home Title During Bankruptcy

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  • 05-15-2018, 12:59 PM
    lawfacts
    What Happens if You're Added to a Home Title During Bankruptcy
    If you are in the process of Chapter 13 bankruptcy, what happens if you're added as a co-owner to the title of a home?

    The debtor's parents are trying to plan their estate and want to add him to the title of the home as a joint tenant with a right of survivorship.
  • 05-15-2018, 02:47 PM
    Mr. Knowitall
    Re: What Happens if You're Added to a Home Title During Bankruptcy
    The parents' best option is to consider a different means of passing the property to the heir, such as a living trust. Adding an heir to a deed can create many complications for the property owner, even in the absence of a bankruptcy. It also will have negative tax consequences, as opposed to taking a home through inheritance, as the heir won't get a step up in capital gains.

    As for the impact on the bankruptcy of being added to the deed, if the addition gives the debtor an equity interest in the home, the debtor will need to check the state's bankruptcy exemptions to ensure that the trustee can't pursue the equity as an asset of the estate.
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