***Wife on Deed***

[Cramdown]

My wife needs to file 7 or 13, but she is on the deed to the house but she can file 13 not 7 (so I've been told) Can I have her removed from the deed so that she can file 7? If so, how long would it take to have her removed from the deed?

Thanks!

[JollyGG]

How much equity do you have in your home?
What state do you live in?
I assume your wife makes below the median income for your state and qualifies for a chapter 7.

[emoney]

If she is removed from the deed for less than
market value that meet the defination of a fraudlent transfer.
regards,
emoney

[butterflywings]

I thought removing her from the deed no matter what is considered automatic fraud in the eyes of the BK court. I wouldn't do it if I were you!

I would NOT do anything like that without consulting an attorney. If a trustee smells fraud they can look back to any and all transfers 10 years back.

[Cramdown]

Not sure what the median income is in my state. My balance has only dropped about 3,000 from the purchase price...only be in the house a year, but has appraised for way more than what I purchased for. My BK lawyer said she would have to wait 2 years to file if we did get her removed from the deed. Does that sound right?

[JollyGG]

If there is no or little equity in the home you should be able to exempt it with your states exemptions. I must not be understanding something here. Why would you need to get her removed from the deed? A home with no equity is really not at risk for seizure and sale by the trustee since their is a lein holder and no profit to be had once the bank is paid.

Perhaps you should give a few realtors a call and ask them what you could sell your house for in a quick sale situation to get an idea of the true amount of equity you have in the house. Also you should find out what your state's homestead exemption actually is. What state do you live in?

I think you need to meet with several more lawyers and get a few more opinions on your situation.

If she qualifies for a chapter 7 and you are not trying to save an asset (because you have too much equity or are behind in payments) then there really is no reason to subject yourself to a chapter 13.

[FreshLikeADaisy]

Ditto to what Jolly said, Cramdown. If you have little to no equity in your home, it's a moot point. Also, if you have the mortgage in both of your names and then you try to quitclaim your wife off the deed, it may very well trigger foreclosure under the due-on-sale clause of your mortgage agreement. Quitclaim only works cleanly when the house is owned outright by the grantor of the deed; in most other circumstances refinancing has to take place as well.

BTW, what your atty told you about waiting sounds exactly right, and even then it's no sure thing. I was reading about a person who had herself quitclaimed off the deed to the family home, only to realize it would look bad in bk so she had herself added back on. When she got to bk, the trustee said the whole thing was fraudulent and after much back and forth, she didn't get her bk. Moral of this story: no asset transfers in preparation for bk. Good luck!!!

[Cramdown]

In other words, don't have her removed....period!! We live in Alabama. When I purchased the home, by myself, in my name, mortgage and all, I did a "joint right to survivorship" 2 or 3 months after I closed on the house.(my wife was my finance at the time). When I purchased the home I got one hell of a deal and now the house appraises for 40-50,000 gran more today. Is the lawyer considering that the difference (purchase vs. appraisal) being equity? I keep thinking she should be able to file 7...I may be wrong.

[keepmine]

Equity is the difference between, the makter value and the loan balance.
Your lawyer is correct. They'll ask about property transfers within 2 years of filing. Unfortunately, Al. has some very puny bk exemptions.

http://www.bankruptcyinformation.com/AL_exemp.htm

[JollyGG]

keepmine gave you some great information.

To add to that; I wouldn't go by a year old apprasial. Call up some realtors and get some market appraisals done by local realtors and don't forget to tell them you want what you could sell it for "as is" for a quick sale. The markets in most areas has decreased dramatically in the last year and you may be able to get a significantly lower value for your home (which is a good thing in bk).

[Cramdown]

So having all that said, we just need to go with filing 13 and leave the 7 alone....right? What does "puny" bk exemptions mean?

[FreshLikeADaisy]

Cramdown, you may still be eligible for a 7... don't assume until you get the property reappraised. I haven't looked up Alabama exemptions so I don't know the specifics, but I think Keepmine's trying to say that compared with other states, Alabama's exemptions are rather small.

But don't give up on a Ch7 until you know what your house is worth *today*. If it ends up that you have a small enough amount of equity to fit within AL exemptions, you can keep your home AND file Ch7... Good luck!

[Cramdown]

***Update*** my wife filed 13 in Feb. '08 there is one small problem, today I receive a letter from CHASE (financed house in my name) they send me a letter of denial on a "workout" that I requested a few months ago. Denied because they (Chase) say I filed 13 which is not true and that I needed to send a letter of dispute. My wife is on the deed but not on anything with Chase, I purchased the home before we got married.

Your thoughts on what I should do and how do you think this might of happened?

Thanks===CD

[Cramdown]

Is there a "generic" letter of dispute or do I just type up a one liner?

[FreshLikeADaisy]

Cramdown, you can word a dispute letter pretty much any way you like; a good idea is to do it in a professional memo format so that you can add the title "Re: Denial of Workout Arrangement Dispute" (or whatever you wanna call it). Give a quick overview, add that you did not file a Ch13, ask them to provide you with your case #, district, and filing details, and reiterate that the home was financed solely in your name, so your wife's Ch13 does not affect your accountability for repayment of the loan. You may want to give it added weight by dangling a possible foreclosure at the end of it, if for whatever reason you are unable to come to an agreement on your workout plan.

Those are my thoughts, but there are sample dispute letters all over Google for everything from credit card charges to phone calls to Pakistan suddenly showing up on the home phone bill to "I didn't like the quality of service and I'm not gonna pay" letters. Take your pick, there are plenty to choose from.

Good luck!!!