Removing signer on Bank Account?

[bklost]

My wife and I are going to be filing ch7 in the next few months. I am a signer on my father in laws Bank of America checking account to help him keep track of things. My wife and I have a credit card and 1st mortgage with B of A. I would like to remove myself from the checking account, because I am afraid that B of A will seize my father in laws money to pay off my credit card and/or the mortgage. I know you are not supposed to close bank accounts pre BK, but what is the advice for removing yourself as a signer.

We also have a similar situation with a partner in a rental property. My partner wants to keep the rental and stay current and run business as usual with out me. I will include the rental mortgage in my BK. My partner would like to remove me from title on the property and the checking account. We are both on the rental checking account now. Can I remove myself from the checking account or does that not look good in the eyes of the trustee?

Thanks in advance

[SleepWellNow]

I was a signer on my mother's account (not B of A) and, prior to filing, I went in with her and asked them to remove my name. They made us close the account and open an account in her name only. Didn't make too much sence to me.

When we had our first consultation with our BK attorney, he did not think it would of been a problem with my name being on the account and we could explain it as my mother's account and I was on the account for administrative purposes only. The key was, I had never deposited or taken money out of the account. I was on it in case there was an emergency in which I would have to access her account on her behalf. My attorney said this was very common.

I think your best bet is to have a free consultation with a BK attorney. We had a rather complicated case (business and rental properties) and the consultation set us on the right tract and gave us a plan of action. Good luck to you.

[BKDefender]

BKLost - you look fine on the first question but not on the second one.
If your name is on the account for signing purposes but your social security # is not listed with the account, then it's not your account. If you were added with full privileges though (i.e. deposit/withdraw/make changes) and they tied your social security # to the account, then you need to take your name off of the account and you'll have to explain to the trustee, prepare to back it up with bank statements and a written statement from your mother, that you were only on the account for admin purposes and had no claims to the money in the account.

As for your rental property question - if it is a true partnership then the home is an asset of yours as is the checking account. If you transfer an asset of yours to someone else prior to bankruptcy without getting something of equal value in return, then it can be considered a fraudulent transfer and the BK Court can reverse it. The big deal here is that if the rental property is profitable then it is worth something to the trustee and he won't like it that you gave it away. Can your partner refinance the mortgage just in his name, get some cash out of the deal to buy-out your equity, and then you convert that cash to exempt assets? (e.g. $10k into Roth IRA for you & your spouse for 2009, up to $10k into Roth IRA for you and your spouse for 2010)

--William

[tigergem]

I had a bank account that I opened and added somebody to it as a signer, and then I had to close the account and open a new one in order to remove him. Yeah that was BofA. And they wouldn't do it over the phone. They wanted me to go in person. But the nearest branch is over 50 miles away, so I sent a letter to their corporate hq with a copy of my driver's license and requested that they close the account. That worked.

[bklost]

Thanks for the replies. I am not sure if I am joint on my father in laws account or just added for emergency. It seems like I can remove myself to protect his assets from B of A and explain the situation to Trustee.

As far as the rental there is no value, no asset. My partner and I disagree on how to continue. My partner wants to continue feeding a bad investment with good money. We are under water significantly with a negative cash flow. My wife and I are done. We have cashed in our kids 529 plans and some of our IRAs to try and make this work. It is not getting better, just worse. There is no asset for the trustee, there might be acouple of bucks in the checking account that we will have to spend down, but the property is worthless. I don't want to do anything the trustee will not like, but I also want to make a tough situation for my partner as easy as it can be.

Thanks