Selling home days before foreclosure

[Dis0314]

I was wonder what yall's thoughts were on this.

I had a second home that had a mortgage on it that was in the process of going to foreclosure. A couple weeks before the banks took the house I asked several people I knew with money if they wanted it so I could avoid foreclosure and avoid having to kick my in laws out (they were paying the monthly note).. so basically the house was for sale with renters in it already. I had a couple people come forward saying they were interested and my mother ended up offering the most which was paying the balance of the mortgage in full. The other wouldn't go that high. So I sold it to her which was about 95k. I had to make one payment of about 1500 to the bank to satisfy the last month and that was it, title was tranferred through the county and all was done..

Fast forward 3 months and I'm forced to file chp7 immediately and I read about the transferring of assets.. House is valued at about 120k.

[despritfreya]

You must disclose the sale to mom on question 10 of the Statement of Financial Affairs. The Trustee will then determine if he/she thinks you sold the property for less than the value. If he determines it was sold below what the market could bring, taking into consideration the fact that the property was about to be lost to a foreclosure, he/she could seek to recover either the property (not likely) or the difference between what has paid for the home and what the home was worth.

Your post shows a $25k difference. But, that does not take into consideration the cost of sale such as real estate commissions, closing costs etc. On the other hand, the sale was to mom. As such the Trustee may try to squeeze you for some $$. You won’t know until the issue pops up.

Definitely discuss this with your attny so that you are prepared to address the issue if it arises.

Des.

[Dis0314]

You must disclose the sale to mom on question 10 of the Statement of Financial Affairs. The Trustee will then determine if he/she thinks you sold the property for less than the value. If he determines it was sold below what the market could bring, taking into consideration the fact that the property was about to be lost to a foreclosure, he/she could seek to recover either the property (not likely) or the difference between what has paid for the home and what the home was worth.

Your post shows a $25k difference. But, that does not take into consideration the cost of sale such as real estate commissions, closing costs etc. On the other hand, the sale was to mom. As such the Trustee may try to squeeze you for some $$. You won’t know until the issue pops up.

Definitely discuss this with your attny so that you are prepared to address the issue if it arises.

Des.

Yeah i mentioned it my first meeting with the attny and he pretty much said we will explain the situation and with the foreclosure it may be a non-issue.. he said we may have to come up with 5-10k to make them happy but we will figure that out if/when it arises..