My question involves bankruptcy in the state of: CA
I was granted a life tenancy by my father and I have a large amount of unsecured debt. I am considering filing Chapter 7 protection. Can a trustee force a sale of the property?
My question involves bankruptcy in the state of: CA
I was granted a life tenancy by my father and I have a large amount of unsecured debt. I am considering filing Chapter 7 protection. Can a trustee force a sale of the property?
Life Tenancy has significant value. It is like a free rental property. You really need to discuss the issue with your lawyer.
since you do not own the property a sale of the property is not relevant to your situation. You own a tenancy which in simple terms, means you are nothing more than a tenant such as where a house is rented to them. although your rent is prepaid although you do have costs associated with possessing the tenancy. You do not hold any true ownership of the property.
Who is the remainderman?
A life tenancy represents a present interest in real property and, absent unusual circumstances, can be sold independently of the property. The property itself, and the remainder interest, would not have to be sold. It's often difficult to find buyers for life estates, or to sell them for significant amounts of money, but what will happen in any given case will depend on the facts -- some life estates will be much more attractive to potential buyers than others.
The remainderman is my sister. Can I be forced to sell the life estate by my creditors?
Mr. K’s response is correct and it is not your creditors you have to worry about. It is the Chapter 7 Trustee. Some of the questions are:
1. What is your life estate worth?
2. After you have “valued” the asset can you protect its value with an exemption?
3. If you cannot protect the asset with an exemption (or only partially protect it) what is the likelihood that someone would be willing to buy it if and when the Trustee tries to sell it?
4. If you cannot protect the asset with an exemption (or partially protect it) should you make an offer to the Trustee to buy it back?
There are other questions but I suspect you now get the picture. You need to discuss this with a qualified bk attny so that you fully understand and appreciate all of the ramifications of filing a Chapter 7 while having this type of asset. Hopefully you will be able to fully protect it with an exemption or be assigned a Trustee who is not interested in dealing with such an unknown commodity.
Des.