Kissimmee, FL asked in Bankruptcy and Real Estate Law for Florida

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

My mother is looking to add me on the deed to her home using a quit claim deed. I am currently living in the home and making payments. However she filed bankruptcy a few years ago and the home was discharged, so she is no longer financially responsible for the home. I read somewhere that if she files the quit claim deed the creditor which is Chase Bank could take the home back? I just wanted to know if this was true? And if there are any other risks with filing a quit claim deed?

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2 Lawyer Answers

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.

Timothy Denison agrees with this answer

James Clifton
James Clifton
  • Bankruptcy Lawyer
  • Fayetteville, GA
  • Licensed in Florida

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.

Timothy Denison agrees with this answer

1 user found this answer helpful

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