Ch. 13, Relocating to Another State, Quit Claim Deed, Reporting Requirements

[peraltaj]

1. Are there reporting requirements concerning relocating to another state and/or quit claim deeds between named joint tenants/owners? Note: Party relinquishing rights will not receive financial compensation.

2. Is the following statement true as it relates to a Ch. 13 case/plan in Florida? "Chapter 13 bankruptcy is only concerned with how a debtor can pay off his debts, which include mortgage payments. Since a quitclaim deed only transfers ownership rights, a debtor is free to sign a quitclaim deed after declaring Chapter 13 bankruptcy."

Thanks

[justbroke]

1. Are there reporting requirements concerning relocating to another state and/or quit claim deeds between named joint tenants/owners? Note: Party relinquishing rights will not receive financial compensation.

In most States, even with a Quit Claim, there must be "some" consideration. Also, some States have a specific minimum amount which could be as little as $1 or could be $10 or more. The Q/Cs in Florida that I have seen were all for $100 of "consideration".

2. Is the following statement true as it relates to a Ch. 13 case/plan in Florida? "Chapter 13 bankruptcy is only concerned with how a debtor can pay off his debts, which include mortgage payments. Since a quitclaim deed only transfers ownership rights, a debtor is free to sign a quitclaim deed after declaring Chapter 13 bankruptcy."

Absolutely false! You must be very very careful with transferring property before and during an active bankruptcy. A Chapter 13 is a "pending" bankruptcy and is therefore "active" for all purposes of the rules. You are not allowed to dispose of property without permission from the court. While the Chapter 13 Plan "may" revert the debtor's property back to the debtor upon confirmation, the debtor is still bound by the rules which require the debtor to seek the court's permission before disposing of any property that the debtor had in his/her possession at the commencement of the case.

When you move, you must notify the court and the Trustee with a change of address. You must also serve notice on all the creditors as well. The court, and more specifically the Trustee, must know where you live, especially if you move outside their jurisdiction.

I really ask you to speak with your Chapter 13 attorney about relinquishing "rights" in a joint tenancy! The Trustee may want to step in, since you don't want your share, and decide to sell the property on behalf of the Estate. Be very very careful with manipulating property ownership when you're in a bankruptcy (or before filing bankruptcy). Perhaps the property has no real value so it would be foolish for the Trustee to want to step into the debtor's shoes, but don't make any assumptions. Trustees in Florida are very good at selling short and still getting a commission!

[peraltaj]

Thank you.

[justbroke]

I'm just worried that if you QC the property, especially without Trustee and Court approval, you are opening up a big can of worms. The Trustee may not even want anything to do with it, but you should seek approval first. Additionally, Trustees in Florida have been known to get "carve outs" from the banks for selling the property1 The "carve outs" have been as high as $10,000 on an underwater property, so one can't assume that something without equity is "worthless" to a BK Trustee.

I haven't seen the Chapter 13 Trustees delve into this area but the Chapter 7 Trustees certainly like to dabble in this area.