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Bankruptsy and a prior quit claim deed

I bought my home over 20 years ago, and I was the only name on the mortgage and deed.
I quit claimed to my ex husband 3 years ago on the deed.
I hold the mortgage.
Now due to a financial crisis I am going to file chapter 7.
I have read some information on how the trustee can construe filing quit claims then bankruptcy as fraud.
When I put his name on, I was gainfully employed and paying all my debts. Then I went from work to comp to retirement.
My fixed income now, cannot support the debt.
Could this situation stop a chapter 7?

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Submitted Thu, 05/15/2014 - 14:02

As long as the transfer was not fraudulent, after being verified, this should not hurt your chapter 7 bankruptcy filing. The fact that your ex-husband and not some family member that you have close relations to does help the situation out. Also if you hold the mortgage, meaning the entire mortgage that was previously on the building has been paid off and you filed a mortgage in the Registry of Deeds in except monthly payments, these monthly payments will be considered as income in the calculations required for your bankruptcy. If you did not pay off the previous mortgage, and simply wrote a deed in your ex-husband's name, your ex-husband is not legally own Matt home, you cannot transfer ownership of the property until all encumbrances have been paid off. So the bankruptcy court will look at this as your house and if you are not able to make the mortgage payments with your income, they will force you to include the house in the bankruptcy and the house may be sold to discharge some of your debts. So if you basically just wrote a deed to your ex-husband and are making payments on the old mortgage, that is not you holding a mortgage, that is just an improper filing of the deed. Many people think that they can simply deed the home over, except money and pay their mortgage company, that is not legal and will not even be considered as a legal transaction in any court. So if that is happened and you have to file bankruptcy and you cannot cover your bills, your ex-husband is going to lose that house because if you can't pay the mortgage, they will not consider your ex-husband income for paying the mortgage.

I have responded to your inquiry according to the laws of Massachusetts, where my firm is located. Laws can vary significantly from state to state and cases tend to be rather fact-specific, so you are best served by consulting with a knowledgeable attorney in weighing your options.
Email messages/Online Correspondence are akin to conversations and do not reflect the level of analysis applied to formal legal opinions. Email/Online responses do not form an attorney-client relationship.

Joseph F. Botelho, Esq.

Attorneys At Law

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