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  1. #1
    Join Date
    Sep 2007
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    6

    Question Quit Claim Deed and Bankruptcy

    Hi all, new here and first post.

    I am planning on filing chapter 7 bankruptcy soon, and have a question about home ownership. My husband and I have been separated for nearly two years and I'm filing for divorce on Tuesday. He is getting the house in the divorce, but I am pressured because of financial burdens to file for bankruptcy before the divorce is final ( I am being sued by a credit card company for nearly $10k). I am on the deed to his home, but not on the mortgage. Is my name on the deed enough for the court to take his home from him if I file for chapter 7 bankruptcy? I have no assets in my name at this time, so chapter 7 for me is viable since I have nothing to liquidate. Should I file a quit claim deed in the state of michigan, and if I do will that save his house from being considered in the bankruptcy?

  2. #2
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    Jul 2006
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    Ohio
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    Default Re: quitclaim deed and bankruptcy

    Quote Quoting djordan798
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    Hi all, new here and first post.

    I am planning on filing chapter 7 bankruptcy soon, and have a question about home ownership. My husband and I have been separated for nearly two years and I'm filing for divorce on Tuesday. He is getting the house in the divorce, but I am pressured because of financial burdens to file for bankruptcy before the divorce is final ( I am being sued by a credit card company for nearly $10k). I am on the deed to his home, but not on the mortgage. Is my name on the deed enough for the court to take his home from him if I file for chapter 7 bankruptcy? I have no assets in my name at this time, so chapter 7 for me is viable since I have nothing to liquidate. Should I file a quit claim deed in the state of michigan, and if I do will that save his house from being considered in the bankruptcy?
    You being on the deed has nothing to do with him. You cannot do the quitclaim without getting permission from the leinholder. Otherwise, they can call the loan due immediately.

  3. #3
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    Sep 2007
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    6

    Default Re: quitclaim deed and bankruptcy

    but I am not on the mortgage at all. Just on the deed. We need to clear it with his mortgage company to get my name off of the deed? This is in their best interest since I have not lived in the home for over 2 years and am not wanting the home in my name or when the divorce is final.

  4. #4
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    Default Re: quitclaim deed and bankruptcy

    Quote Quoting djordan798
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    but I am not on the mortgage at all. Just on the deed. We need to clear it with his mortgage company to get my name off of the deed? This is in their best interest since I have not lived in the home for over 2 years and am not wanting the home in my name or when the divorce is final.
    What makes this in the best interests of the mortgage company?

  5. #5
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    Sep 2007
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    6

    Default Re: quitclaim deed and bankruptcy

    I am the one filing bankruptcy, my husband is not. He is current on his mortgage and wants to keep the house. I am filing bankruptcy for unsecured debt, and filing divorce at the same time.

    Basically, my signing a quitclaim deed would take me off of the deed to the property, and hopefully spare the mortgage company and my ex from being involved in my bankruptcy at all.

    I don't want the house, I don't want to have the house listed on my bankruptcy. I plan on signing off on it when we go to divorce court anyway, I just can't wait until the divorce is final as I'm afraid that my creditors are going to start garnishing the little wages that I have.

  6. #6
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    Default Re: quitclaim deed and bankruptcy

    Quote Quoting djordan798
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    I am the one filing bankruptcy, my husband is not. He is current on his mortgage and wants to keep the house. I am filing bankruptcy for unsecured debt, and filing divorce at the same time.

    Basically, my signing a quitclaim deed would take me off of the deed to the property, and hopefully spare the mortgage company and my ex from being involved in my bankruptcy at all.

    I don't want the house, I don't want to have the house listed on my bankruptcy. I plan on signing off on it when we go to divorce court anyway, I just can't wait until the divorce is final as I'm afraid that my creditors are going to start garnishing the little wages that I have.
    Your creditors, if the house has enough equity, have the right to attempt to force a sale of the home, in order to recoup some of their money. A transfer so close to the filing would raise a red flag with the trustee.

  7. #7
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    Sep 2007
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    6

    Default Re: quitclaim deed and bankruptcy

    even if I haven't lived in the home for 2 years and can prove it? We have a custody order and a child support order. I have my lease agreement from my apartment.

    I was never on the mortgage and even signed away my "dowry rights" when we bought the home. Since I'm not on the mortgage and never was, will they still consider this my asset?

  8. #8
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    Default Re: quitclaim deed and bankruptcy

    Of course they will. Not being on the mortgage simply means that you're not responsible for the mortgage payments.

  9. #9
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    Sep 2007
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    Default Re: quitclaim deed and bankruptcy

    poop, thanks.

    Time to contact my attorney and see what they have to say about what we can do. It seems I may be screwed here. I don't want to hurt my ex, but I also don't want to drown in debt anymore and this is a touchy subject.

    Thanks for the advice.

  10. #10
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    Default Re: quitclaim deed and bankruptcy

    djordan798,

    Ask your attorney to help you interpret this as it applies to your circumstances.

    Bankruptcy Section 523(a)(15)

    If a debt owed in the wake of divorce is not for support, Section 523(a)(15) sets out the test to determine if it might still be nondischargeable in bankruptcy. Here's the text of 11 U.S.C. §523(a)(15):

    (a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt-- . . .

    (15) not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, a determination made in accordance with State or territorial law by a governmental unit unless--

    (A) the debtor does not have the ability to pay such debt from income or property of the debtor not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor and, if the debtor is engaged in a business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business; or

    (B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor.

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