Ch. 13 after selling a house with equity.

[bankganc]

I'll try to make this short. My dad is in debt and was going to file ch.13, where he could walk away from every thing. However the lawyer told him that the HOUSE my sister is in would be lost also due to the equity in it. However my sister is in the process of buying the house (should close any day now) it had a reverse on it. The lawyer told him he could sell the house to my sister HOWEVER he would have to wait TWO YEARS after the closing date to file for Ch. 13. Is this True? If my sister has a mortgage can the collectors take it from her. Thanks for any advice or help.

[ssmdem]

I would think because it's being sold to a relative, it's going to be highly scrutinized. Is she buying it at fair market value? Or is he giving her a deal?

[newbie2]

I'll try to make this short. My dad is in debt and was going to file ch.13, where he could walk away from every thing. However the lawyer told him that the HOUSE my sister is in would be lost also due to the equity in it. However my sister is in the process of buying the house (should close any day now) it had a reverse on it. The lawyer told him he could sell the house to my sister HOWEVER he would have to wait TWO YEARS after the closing date to file for Ch. 13. Is this True? If my sister has a mortgage can the collectors take it from her. Thanks for any advice or help.

Is your father selling the house for current market value? What does he plan to do with the equity (cash) he receives after he and your sister close on the home purchase?

There are too many variables in this situation, and I would imagine the attorney your dad talked with has the answers to these questions and that is why he gave the advise that he did.

Edit: Just saw SSDEMs reply. We were typing at the same time :-)

[bankganc]

Tax value is $90,000 (over priced)should be $80,000
My sister is getting it for $55,000.

[StartingOver08]

This looks like an insider deal even if the actual market value is $80k - your sister is getting it for $25k less than market.

The Trustee can look back UP to ten years on real estate transactions. The attorney gave you a two yr date. He would know the Trustee's in your area and how they work. It is best to discuss the details with either this BK attorney or a couple of BK attorney's in your area so you have a comfort level with their information.

On the other hand, if your sister buys the property, even at this discount price, how can the creditors attach the property for your Fathers' debt? Talk to your attorney about this too. Looks like your Father may have to look to the long term to file BK safely.