Fullerton, CA asked in Bankruptcy for California

Q: Need to file bankruptcy My parents house is under my name but it's not mine.

house was bought in 2008 with my name with first time buyer benefits.

one time deposit with my bank account and never made payments with my account afterwards.

my parents has all the records of paying the loan.

2 years ago, the ownership of the house was transferred to my fathers name.

however, the loan is still under my name. so far the house equity is worth 250k

I owned a restaurant and was corporated since 2008 and had to close 2 years ago. I owe approx. 125k in personal credit cards, loans, rent, mostly used to maintainan the business. I closed the business in 2015 and now

I 've been working uber, my wife makes 1600 a month.

I have a new job opportunity and need to file bankruptcy to receive checks from work.

I'm concerned about my parents house

One lawyer even declined to take the case because it's too much trouble.

Should I consider paying the loans off somehow? Really can't afford to

should I file bankcruptcy and risk my parents house?

share your thoughts please

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4 Lawyer Answers
Leon Bayer
Leon Bayer
Answered
  • Bankruptcy Lawyer
  • Long Beach, CA
  • Licensed in California

A: I'm not surprised by the reaction of the other lawyer. I almost didn't even want to post an answer.

The problem here is whether or not the transfer of the house is a fraudulent transfer. You say it's not your house, and it never was your house. However, the use of your credit and "first time buyer" status made it possible for the home to be purchased. And, the transfer from you to your parents gave them a $250k windfall! I assume your parents couldn't get their own financing. Who claimed the income tax deductions for the home?

I suggest you see another attorney immediately, preferably a state bar certified bankruptcy specialist who has many years of experience. I'm thinking a safer way to proceed might be for you to file under Chapter 13 bankruptcy, with a very low % repayment plan - something for you to talk over with the next lawyer. I hope this info helps lead you to a solution.

Theodore Allan Greene
Theodore Allan Greene
Answered
  • Bankruptcy Lawyer
  • Sacramento, CA
  • Licensed in California

A: I agree with Mr. Bayer. Especially the part about finding a Bankruptcy lawyer who can help you navigate through all the issues. Keep looking until you find one.

Harlene Miller
Harlene Miller
Answered
  • Bankruptcy Lawyer
  • Irvine, CA
  • Licensed in California

A: I agree with my colleagues - this situation requires an experienced bankruptcy attorney (look for a certified specialist in bankruptcy law), or an attorney that specializes only in bankruptcy - that handles chapter 13 and chapter 7 cases. Mr. Bayer raises several good questions and issues that need to be addressed and bankruptcy may not be a solution.

Manuel Alzamora Juarez
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Answered
  • Bankruptcy Lawyer
  • Berkeley, CA
  • Licensed in California

A: If your business was a corporation, then you could bankrupt the business for the business expenses. If they somehow breach the corporate veil and attempt to sue you personally, then you will be facing the issue of your house transfer to your parents withing the last two years. This is a big issue specially since you are still in the loan.

If the court does not see it your way, and attaches your share of the house, then your portion could be used to pay the creditors.

At that time you may have the choice of going Chapter 13. Best of luck.

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