Timing Question

[chinabloo]

What is the name of your state? Ohio

My husband is currently unemployed. If we are able to refinance the house into just my name, how long would he have to wait to file bankruptcy? (There are a lot of debts in his name and this would help out tremdously without risking the house.)

 

[JETX]

My husband is currently unemployed. If we are able to refinance the house into just my name, how long would he have to wait to file bankruptcy? (There are a lot of debts in his name and this would help out tremdously without risking the house.)

In order to minimize the chance of any creditors claiming that the 'removal' of his name was a 'fraudulent conveyance', you should wait at least six months.... and preferably a year.

 

[AttorneyOney]

This question doesn't have an easy answer. When you say "refinance", what exactly are you talking about? From context, I think you mean that the two of you would execute a deed to just you. You can easily run afoul of the fraudulent conveyance laws when you do this. Such laws allow creditors to set aside transactions that are done with the actual intention to hinder creditors or that are done for inadequate consideration at a time when the transferor is insolvent. It sounds like both of the predicates for the law would be present in your case.

The bankruptcy code has its own fraudulent conveyance section (548), which includes a lookback period of one year. The trustee can also often take advantage of the state law of fraudulent conveyances, which may have a longer lookback period. There's even an argument that the trustee can use the common law of fraudulent conveyances, where the lookback period is essentially unlimited.

Your situation isn't necessarily hopeless, though. If your equity in the home is less than the amount you can exempt, H's creditors won't be able to get to it anyway. You'll need to ask a local attorney about homestead exemptions to know the answer to that.

 

[JETX]

I agree.
As for the amount of allowed 'homestead' bankruptcy exemption in Ohio:
"Real or personal property used as residence to $5000
Property held as tenancy by the entirety may be exempt against debts owed by only one spouse"

 

[chinabloo]

Thanks.....the last thing we want to do is to break any laws or commit fraud.

If he goes without a job for too long (this time), then we'll have to see an attorney to see what our options are.

 

[AttorneyOney]

I should have said not to read too much into the word "fraudulent". The fraudulent conveyance laws allow creditors to set aside certain transactions without regard to whether actual fraud has occurred. You can run afoul of these laws without committing a crime.