need advice in pennsylvania!!

[psphardship]

here's my story...trying to keep it brief as possible, but informative, to get some much needed advice!

i have credit card debit (two cards) and two bank loans (one is secured). been working two jobs for almost two full years now trying to make some headway. i am COMPLETELY exhausted working so many hours/long days. it is going to soon effect my health! i am seriously considering chapter 7 bankruptcy, but have a question that may prove to be a roadblock for me? many, many years ago when my parents health got bad, they signed their home over onto me & my sister's name. my mom passed away this past year, but my dad still lives there. i live in an apartment & do not reside with him....it's just on our (me & sis. will having this home on my name be an issue in filing for bankruptcy?

[btbeme]

Welcome to the forums.

If your name is on the deed to the house then it is a factor. How exactly are you and your sister listed on the deed?

What is the value of the home? Is there anything owed on the home (mortgage)? If so, who pays it?

Fill us in on some details and maybe we can help. Certain assets, up to certain values, can be protected in a Ch 7. Moreso in a Ch 13, which can help with your debt and help keep the home out of reach should you not be able top do so in a Ch 7.

[psphardship]

thank you for responding!! yes, my name is on the deed. what do mean when you ask "how exactly are you and your sister listed on the deed?" do you mean 50/50?

i am not exactly sure the value, but did a home value online & its around $60k. there is no mortgage.

what other info would be helpful?

thank you very much! paul

[btbeme]

This is a VERY broad-stoke answer...

If you and your sister are listed on the deed as 50/50 owners, then you may have a problem with a Ch 7.

Pennsylvania's BK exemptions are very thin; however, you can opt to use the Federal exemptions. Federal exemptions allow for $21,650 in real property, which would include a home. So, to protect a vehicle, personal items, etc all of that would have to fit under the $21,650 federal exemption limit. Since your ownership share of the home is about $30,000, that does not add up in your favor.

That being said, not all hope is lost. If there is someone living there, and other owners on the Deed, that somewhat complicates the process of the Trustee seizing the property and selling it. But Trustees have an obligation to get everything they legally can from you to pay your creditors, so while the home would not likely be seized and sold, someone - you - would have to come up with a great deal of money to pay the Trustee for the value not covered by the exemptions.

Bottom line - you need to speak to an attorney or two, most certainly. A Ch 7 may not be of benefit; a Ch 13 may be more of what you may need for relief.

And do NOT do something all sure-fire crazy like transferring off the deed. That would be considered BK fraud, which is a federal crime.

[df04527]

Only to make sure this stands out: DO NOT make any moves to transfer your ownership to your sister or anyone else, the trustee CAN undo it in a heartbeat.

Stick around this forum, there are some very smart folks on here including a few BK attorney's as well. They will advise you more.

[psphardship]

Thank you so much for your advice. I was actually considering selling my half of the house to my sister (maybe for a couple of thousand-she doesn't have a lot of money), but I didn't know how long I would have to wait to file bankruptcy if I did sell it. I heard 2-5 years... Does anyone know? I don't want to commit fraud but would like to sell it if I don't have any other options; however, if I did have to wait 5 years for it to be legal, it wouldn't help. Working 70-80 hours a week at the age of 52 is killing me... Plus my vehicle won't last that long and I don't even have enough left over to buy another, even working this many hours.

Thanks again, Paul

[Pjmax]

Hi Paul, I'm not an expert, so I can't speak to the legal what-ifs, but I do think you should make a few (3-5) appts. with BK attorneys ASAP, before you make any decisions. Most BK attorneys offer free initial consultations, and you will probably get a different opinion from each one of them. Very few of us have found the right lawyer with just one consult, and it will take a few to find the right one for you. After you've met with a couple and asked a lot of questions, be sure and come back here for more advice on what you find out from your consults.

[LadyInTheRed]

You could sell your interest in the home to your sister, but it must be for fair market value. And you want to be sure that you document what the fair market vlaue is. Selling it for less than market value won't work. A BK trustee can look as far back as he wants to look for property that you transferred in order to keep it out of the hands of your creditors.

[btbeme]

To add to LIR above - fair market value might mean doing a true appraisal, then a quit claim on the Deed along side a payment from your sister. That payment would have to be for half the value, and that payment would then become an asset (cash) that you would now have to pay your bills. Or, if you entered into a payment program with her, that payment would become income and the remainder of the unpaid mortgage might be considered an asset.

So, speak with a few attorneys. My best guess is that you may be staring at a Ch 13 rather than a Ch 7.

[LadyInTheRed]

To add to LIR above - fair market value might mean doing a true appraisal, then a quit claim on the Deed along side a payment from your sister. That payment would have to be for half the value, and that payment would then become an asset (cash) that you would now have to pay your bills. Or, if you entered into a payment program with her, that payment would become income and the remainder of the unpaid mortgage might be considered an asset.

So, speak with a few attorneys. My best guess is that you may be staring at a Ch 13 rather than a Ch 7.

I agree with all of that except the quit claim. When you execute a quit claim deed, you are given whatever interest in the described property you might have, but are not guarantying that you actually have full title to that interest. Quitclaim deeds are used for gifts and inheritances. In an arms length transaction, which is what the sale to the sister needs to be, the buyer would insist on a grant deed or in some states, a warranty deed which means the seller is guarantying that they own the interest they are conveying.

[keepsmiling]

Here's another thought, though it might be rather out there...
Could you stand moving into the house with Dad? Avoid bk entirely by reducing expenses?
I'm sure you've considered it but figured I'd throw it out there just in case. Since you've got a complicating factor.

[EandGWZ]

Here's another thought, though it might be rather out there...
Could you stand moving into the house with Dad? Avoid bk entirely by reducing expenses?
I'm sure you've considered it but figured I'd throw it out there just in case. Since you've got a complicating factor.

Good suggestion. Outside of that I like what pjmax had to say regarding free consultation with area BK attorneys prior to making any decisions.