Boyfriend and Girlfriend buy a house together.

[newbie2]

update for anyone following thread.

we just heard from the trustee today and she declared me "asset-less" and will not be pursuing the 50% ownership i transferred days before filing...whew.

Now my ex- wants me to re-affirm the house.

I'm not sure what hurdles i have to clear to do this (i.e. bank has to agree, court have to agree) but i want to get this done too so she can stay at the adjustable interest rate 2.5% vs. refinancing up to 6% (a difference of between $2500 a month and $5550 a month to her).

In the meantime, I'm covering myself by having her sign an irrevocable policy that pays off the house and deeds it to her daughter in the event of her passing.

Comments welcome.

DON'T reaffirm the house. Unless the lender makes it a condition of her keeping the house there is no reason to reaffirm and every reason not to.

[SunshineGal]

Just my opinion, but I would NOT re-affirm the house. As long as she continues to pay as agreed, she shouldn't have a problem with the lender.

[helpinNE]

I would not advise reaffirming the house, if she would default at some point in the future, the bank will then come after you.
I would consider this very carefully and proceed with caution.

[sebaco]

update for anyone following thread.

we just heard from the trustee today and she declared me "asset-less" and will not be pursuing the 50% ownership i transferred days before filing...whew.

Now my ex- wants me to re-affirm the house.

I'm not sure what hurdles i have to clear to do this (i.e. bank has to agree, court have to agree) but i want to get this done too so she can stay at the adjustable interest rate 2.5% vs. refinancing up to 6% (a difference of between $2500 a month and $5550 a month to her).

In the meantime, I'm covering myself by having her sign an irrevocable policy that pays off the house and deeds it to her daughter in the event of her passing.

Comments welcome.

[newbie2]

Again, your lawyer is looking for fraud. When you transfer title of an asset or part of an asset prior to filling bankruptcy within a certain amount of time (can be up to two years prior), this is what occurs. It doesn't matter who paid what during the time the property was in joint names; it's the value of the asset that matters and the timing of the transfer. It is apparent by your initial posting that you knew you were going to file at the time of transfer and that was easily picked up by the trustee; that is the issue, not that you were trying to be nice to your girlfriend. The legal world is emotionless. Your girlfriend's feelings or payments while you were living there don't matter.

Bingo! I don't know why people don't talk to an attorney before they do something like this. Trustees can spot this kind of thing in 2 seconds, and I think it makes them salivate.

[Flamingo]

Again, your lawyer is looking for fraud. When you transfer title of an asset or part of an asset prior to filling bankruptcy within a certain amount of time (can be up to two years prior), this is what occurs. It doesn't matter who paid what during the time the property was in joint names; it's the value of the asset that matters and the timing of the transfer. It is apparent by your initial posting that you knew you were going to file at the time of transfer and that was easily picked up by the trustee; that is the issue, not that you were trying to be nice to your girlfriend. The legal world is emotionless. Your girlfriend's feelings or payments while you were living there don't matter.

[newbie2]

So if I could go back in time I should have placed my 50% interest into the bankruptcy instead of signing a warranty deed transferring my half? I thought by doing this I would, in affect, be deeding my portion to the State, instead of the rightful owner....

Given that I've had the 341 hearing and the trustee announced her intention to look into this further, should I sit on my hands or activate my lawyer to try to reverse the action?

The action can't be reversed. It's done. Now all you can do is wait and see what the trustee wants to resolve it. Hopefully he (or she) will think it is not worth the cost and effort to try and get back the money (equity).

[SMinGA]

If you had exemptions available to cover it - then exempting as much as possible and perhaps trying to work out a deal w/ the trustee if there was anything remaining - would have been better than trying to get assets out of your name so the BK court could not go after them.

You should contact your attorney, find out if you have exemptions to cover part or all of the value and even if that is possible now after the fact.

[sebaco]

So if I could go back in time I should have placed my 50% interest into the bankruptcy instead of signing a warranty deed transferring my half? I thought by doing this I would, in affect, be deeding my portion to the State, instead of the rightful owner....

Given that I've had the 341 hearing and the trustee announced her intention to look into this further, should I sit on my hands or activate my lawyer to try to reverse the action?

[SMinGA]

If you were both on the note, then your filing BK would not have a long term effect on her obligation to pay it. Yes, she could refinance to have it in her name only - but that is pointless. Your obligation to pay the mortgage will be discharged. Hers will not be. The loan rate does not change because of the BK filing.

The problem is not with the mortgage (obligation to pay). The problem is with you 'giving away' your ownership interest.

[sebaco]

As for reaffirming the mortgage, why would you reaffirm the debt on a property you no longer own?

Well, she called me in a panic a couple of weeks ago and said "the house is in bankruptcy, what have you done?!" She then called the bank and they said she would have to give up her very favorable interest rate (around 3%) and refinance around 5% unless the house was pulled from the bankruptcy.

Very, very cloudy situation. Not sure who to believe. I certainly don't want to cause more financial strain from her.

And "yes" I understand the risk. However she has committed to selling the home as soon as kid graduates from college. And "yes" i plan to get all of this in writing.

[SunshineGal]

If I was your EX, I would get myself a good attorney. I would also start paper trailing the down payment and last four years worth of cancelled checks showing the payments were made from her own funds.

As for reaffirming the mortgage, why would you reaffirm the debt on a property you no longer own?

[sebaco]

Thanks for the feedback. What's troubling is that the lawyer predicted (before ever filing) that the trustee wouldn't attempt to collect on "half a house", owned by other parties.

Meanwhile, my ex-girlfriend, stunned by these events (she didn't know anything until I filed) is lawyering up herself.

Fun times.

[frogger]

The WHOLE reason for transferring the deed and for me to reaffirm is to ensure she can stay in the house.

Once again, that would be a very foolish thing to do. LISTEN to your lawyer.

[sebaco]

Yes, my lawyer is advising I wait before I reaffirm the house.


The WHOLE reason for transferring the deed and for me to reaffirm is to ensure she can stay in the house. I almost ruined her when I moved out and now given the favorable interest rate on the house (it's around 3%) she can afford to stay.