Quincy, IL asked in Bankruptcy for Illinois

Q: Personal Bankruptcy Question

My wife and I found ourselves in a considerable amount of debt in the last year because I had to take time off from my job and recuperate from surgery that I had. We just couldn't keep up with everything with the small amount of income that was coming in. We tried to do the right thing and create a plan to relieve ourselves from this financial burden. My in-laws offered to sign over the deed to their house that was free and clear from debt as collateral. We were very, very reluctant to accept such a drastic measure, but I knew I was going back to work and my salary can range up to $125,000/yearly. So we accepted their gift(bless them). The short of it is, NO bank was comfortable taking a home that was currently being used as a dwelling for collateral. Last option: we file for Chapter 7. We signed the deed for the house over to my wife's brother. We never made a profit from this property. Will this former ownership of this property be a problem when the trustee does his research?

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2 Lawyer Answers

Ray Choudhry

Answered
  • Bankruptcy Lawyer
  • Moline, IL
  • Licensed in Illinois

A: What you did was give away an asset that belonged to you prior to filing bankruptcy.

Giving away the house is no different than giving away money or stocks and bonds.

The Trustee has a right to get that house back and sell it to pay the creditors.

The Trustee won't have to do much of a search since you will tell him what you did when you fill out the forms.

Bruce Alexander Minnick agrees with this answer

Timothy Denison

Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: Yes. You need to contact a competent bankruptcy attorney to review your complete financial situation before you do anything.

Bruce Alexander Minnick agrees with this answer

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