Q: Can a quit claim deed still be filed after home being discharged in Bankruptcy?

A: It is highly likely the creditor could demand payment in full once the deed is recorded. See a real estate lawyer to discuss the possibilities and to prepare a proper deed if one is advisable. Quitclaim deeds cause more problems then they solve. You should consult a real estate lawyer who is also experienced in mortgage foreclosure defense. While the bank has not foreclosed because it is receiving payments, it still could foreclose because you mother likely agreed to surrender the property.

A: There are several issues to address here: 1) Even though your mother filed bankruptcy, the house may still be subject to the mortgage unless the balance of the loan has been paid in full. While a bankruptcy discharges the financial obligation to pay a mortgage, it does not remove the mortgage from the property. Ultimately, the mortgage must be paid off even though there is no obligation to repay it. 2) A quitclaim deed should not be used because it may sever the title insurance policy your mother purchased when she purchased the home. A standard warranty deed would suffice and preserve the title insurance. 3) A transfer to a child will not trigger the due on sale clause referenced from the mortgage because it is an exempt transfer under the Garn-St. Germain Act. To summarize, the property can be transferred to a child with a warranty deed without triggering the due on sale clause. However, someone will still need to pay the mortgage or the property will go into foreclosure. Feel free to reach out for a free consultation.