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  1. #1
    Join Date
    May 2013
    Location
    Southern California
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    28

    Default Inherited Property in Chapter 7 Bankruptcy Procedings

    My question involves bankruptcy in the state of: California
    Hello everyone, I have a few questions regarding the filing Chapter 7 and property(Real Estate and personal items).
    I am awaiting my court date in the near weeks and I need some guidance please. I have been told that after my lawsuit goes to first court date the Judge will award a Judgement to the Plaintiff that day. They can then go about garnishing my wages and attaching Liens to my 25% interest in a property that I inherited from my Dads estate.

    I was told the Garnishment would continue till the full balance of 7000.00 was paid in full.

    I was told there may be a lien attached to my portion of the property 25% (on a strip of land in a commercial district worth 70,00 at last appraisal) (Zillo.com says nearby land is worth 200,000 to 250,000 for good homes ours has a shack type of structure on it you know old shabby etc.) The Lien will stay until the property is satisfied, maybe.

    Can I sell this property for less than its worth ie 2000.00 and get name off of title?
    There may be other questions but am limited by time today.

    Thanks to all

  2. #2
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Regarding Inherited Property and Chapter 7 Procedings

    Quote Quoting matt291
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    Can I sell this property for less than its worth ie 2000.00 and get name off of title?
    Sure you can but don't be surprised when the creditor or the bk trustee when you file the bk goes after the recipient of the conveyance to recover it or its true monetary value. Transfering a valuable asset for little or no consideration is a "fraudulent conveyance". Please Google the term.

    Des.

  3. #3
    Join Date
    May 2013
    Location
    Southern California
    Posts
    28

    Default Re: Regarding Inherited Property and Chapter 7 Procedings

    It was not my intent to defraud anyone I must make that clear. My female relative has limited funds and another is flat broke. I must assume using the same logic, gifting is out of the question as well.
    My other question is claiming it as my home as it is the only land that I own. I have been staying at Moms house due to her disability which is what one member of family has asked me to do in return for rent. When mom dies her house goes back to bank and I am out on the street. Logic says I find myself back at my dads old house.
    Thanks for your time and talent.

  4. #4
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Regarding Inherited Property and Chapter 7 Procedings

    When you sell a $200k property for $2000, when in a ch 7 it is fraudulent conveyance. You must notify the trustee and property must be sold for fair market value. Is it worth several years in club fed to get out of a $7k debt?

  5. #5
    Join Date
    May 2013
    Location
    Southern California
    Posts
    28

    Default Re: Regarding Inherited Property and Chapter 7 Procedings

    Quote Quoting Disagreeable
    View Post
    When you sell a $200k property for $2000, when in a ch 7 it is fraudulent conveyance. You must notify the trustee and property must be sold for fair market value. Is it worth several years in club fed to get out of a $7k debt?
    I am not yet in ch 7 only being sued for a portion of the massive debt that I have. This company has other accounts in my name waiting for me to pay on them. I can't pay only a few companies and ignore others, as they too can bring lawsuits as well.
    My debt is massive and needs attention so this is why I consider Bk ch 7. This is what everyone is telling me to do go Bk. The last Bk lawyer advised me to try to negotiate with the plaintiff first. They have refused my first offer. He did advise me to sell my portion to "Raise funds for a settlement offer". This may be where I got sales idea.
    Thanks for all input.

  6. #6
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Regarding Inherited Property and Chapter 7 Procedings

    I need to clarify something. . . one poster alluded to "club fed". You suggested "defrauding". A fraudulent conveyance is a legal term of art. It is not "illegal" to convey property for little or no consideration. Doing so, however, makes the transfer voidable based upon state civil law under the "fraudulent conveyance statutes". Think of it as setting aside an "unequal exchange for value" and recovering an asset that can be utilized to satisfy a creditor's judgment. Sometimes there is an element of civil fraud such as when the property is deliberately transferred in an effort to hinder, delay or defraud a creditor. But such is still civil in nature and certainly not a "federal" matter.

    In the context of a bk, while a Trustee can look back 4 years (depending upon state law) transfers done within 2 years prior to filing must be disclosed. The bk trustee then decides if the transfer is subject to being set aside as a fraudulent conveyance (unequal exchange). If so, he demands the return of the property (or its cash equivalent) and then sells it for the benefit of all creditors.

    "Club fed" might come into play if the bk debtor deliberately failed to list the transfer and thus was perpetrating some sort of bankruptcy fraud.

    As to the homestead question, I am not familiar with Ca homestead laws but I would imagine that you must be residing on/in the property to utilize such an exemption. Check with a Ca attny.

    Des.

  7. #7
    Join Date
    May 2013
    Location
    Southern California
    Posts
    28

    Default Re: Inherited Property in Chapter 7 Bankruptcy Procedings

    I have been reading further and the choice seems to be allowing the lawsuit to proceed and then allowing other lawsuits to pop up one by one until paid. This is the most expensive option due to high interest that can still be charged on a old debt, which makes payoff impossible right?
    Chapter 7 with some possible problems
    Chapter 13 with long term manageable options including keeping property. Chapter 13 is seeming more desirable to me now. What do you think?
    Matt291

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