Quitclaim

[sfermano]

My ( California ) divorce was final in February,2001. In April, 2001, my wife quitclaimed the house we had owned as tenants in common, to me. I had the home for sale and actually found a buyer for it. Now, in June, 2001, she has filed Chapter 7 ( in California )to protect herself from creditors ( she has run up over $150,000 in debt between her business and credit card spending ). I received a notice from her attorney telling me that per USC 362, I cannot sell the house.

Is it possible that she failed to tell her attorney that she quitclaimed the house over two months ago or does her bankruptcy actually affect my ability to sell it, even though her name is not on the deed?

 

[HomeGuru]

The creditors and the BK Trustee will deem that a fraudulent transfer has occurred and the property will be subject to BK Court jurisdiction. The Trustee may allow the sale to go through but will at least keep your wifes share of the proceeds.

 

[sfermano]

Why would this be deemed a fraudulent transfer if we did it on her request? She was not coerced into signing it, but instead wanted to get her name off the deed so that when she did file for bankruptcy, it wouldn't be a factor and our two children could benefit from the equity in the home, in the form of college money for the future. I just don't understand how this would be considered a fraudulent act...

 

[bigun]

Because that is money that should go to creditors. Trustees take a good hard look at any property transfers that occur 12 months prior to filing. In fact, in my jurisdiction, they go back 2 years.
You and your ex should have done this a lot sooner or she should have held out longer before filing.

 

[HomeGuru]

Why would this be deemed a fraudulent transfer if we did it on her request? She was not coerced into signing it, but instead wanted to get her name off the deed so that when she did file for bankruptcy, it wouldn't be a factor and our two children could benefit from the equity in the home, in the form of college money for the future. I just don't understand how this would be considered a fraudulent act...

My response: thank you, your explanation explains perfectly the very reason the transfer will be deemed fraudulent.
I suggest you read up on the BK laws. Did you know that there are 2 BK Chapters in your wife's situation that being 7 and 13? Did you know that there are both State and Federal BK laws? And homestead issues may differ but what actions are deemed as fradulent acts and transfer of assets are the similar? I did not make the laws, I just advise people to follow them.