Can take a Home sold to Mom?

[startover05]

I purchased a home from my Mom in January of 2003, got pregnant and couldn't afford the home so I gave it back to my Mom through title company in December 2003 but the loan was kept in my name. We also credited my Mom $50,000 because she was finishing the basement. But my tax returns and title has shown the property transfered 2 years ago. I filed Chapter 7 yesterday, I don't own the home and have no claim to it but there is my Mom's equity in it. Will they try to take her house because the loan is still in my name?

[robivi3]

If you could post your State it may help you get an answer. Under the new law regarding equity the house may be up for grabs regarding the title issue. Remember that certain aspects of the new law regarding property became effective the day the President signed off on the legislation.

This is definitely a question for a good local Attorney.

[HHM]

Who is making the mortgage payment, I assume your mother is, correct? As long as the payments are current, the mortgage company cannot foreclose.

[StaciMM]

Counsel is always a good idea when property might be lost.

My thought is that if your name is not on the title/deed you should be ok (because you don't own the house, and the BK court shouldn't be able to take something that belongs to someone else). Are the payments being made?

[startover05]

Yes, the payments are current and being made by my Mom.

[startover05]

Colorado is the state I filed and where the property is located

[HHM]

Since you filed under the existing law, you will probably be alright. I don't think the trustee can go back more than a year to undue the transfer. However, since the transfer was to an insider and probably for less than fair market value, you are not 100% out of the woods. And becaue the loan is still in your name, you will have to list the mortgage creditor, but not list an associated asset. As a result, you can count on the trustee asking you to explain the situation and perhaps even request that you produce the various sale and title documents.

[startover05]

The house was actually sold at more than fair market value and credited back to her so she could use funds to upgrade the house and finish the basement.

[robivi3]

Ah, the title was transferred, helps to read it twice. In that case I would listen to HHM but also just check with an Attorney. That doesn't look like a problem, though.

[Minnymouth]

Question,
Since the mortgage is still in your name are you listing the mortgage company as a creditor and trying to get it discharged??

Minny

[startover05]

We listed it as a creditor because it was required but my mom is refinancing the house (hopefully will be done before the creditors meeting) so we aren't looking to discharge.

[Minnymouth]

Does your lawyer KNOW you are doing this re-finance during the period between filing and 341 meeting???
Even though the debt is yours, this credit would be getting "special treatmet" (by your mother) by buying the mortgage.........

Need to ask you lawyer about this......

Minny

[HHM]

Minny, I really don't think it will be a problem. Also, regarding preferences to creditors generally, you are only required to treat creditors that a similarly situated fairly. You can show preference to different classes of creditors, i.e. you can give secured creditors preference over unsecured. etc (in fact, when you keep paying on a car or reaffirm a car loan, you are prefering one creditor over another). However, what you can't do is treat your AMEX card different than you MasterCard.

Also, in startover's case, none of what has happened or what she is doing will affect the assets of the bankruptcy estate, so there is really nothing for the trustee to get excited about.

[Minnymouth]

Thanks HHM for keeping me straight,
I'm still learning....
Question - is this creditor considered secured or unsecured since startover does not actually own the home anymore?

Minny