Ormond Beach, FL asked in Real Estate Law for Florida

Q: My parents want to quitclaim 2 houses to me,later plan to do a bR.what should i do.i have VA and houses are being rented

Both houses have someone renting them. I will collect on the rent from both properties when the quitclaim is complete. The problem I am having is that the loan is not in my name, but only the properties. WHEN my parents finish their divorce they both plan to file Bankruptcy, leaving them both with their own houses and me with two houses. But when they file BR...or the houses go into Forclosure...what can i do about this..what should i do about this..im a singe father of two and i have my VA LOAN from the service. How can i benefit from this at its highest potential. thank you.

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2 Lawyer Answers
Nicholas Randall Jones
Nicholas Randall Jones
Answered
  • Kissimmee, FL
  • Licensed in Florida

A: Be very careful in this situation. If your parents plan to quitclaim these properties to you to avoid creditors, the transaction can be viewed as a fraudulent transfer, and may be rescinded. Also, when they file bankruptcy, the houses will have to be surrendered, as they are not either of your parents' homestead. The bank will retake possession once their discharges are final.

Dennis Chen
Dennis Chen
Answered
  • Winter Garden, FL
  • Licensed in Florida

A: Your parents should reconsider their course of action. It could be viewed as bankruptcy fraud. If the rental properties are upside down they may benefit from a chapter 13 where they may be able to cram down the secured loan to the value of the property and the balance of the loan will be treated as unsecured.

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