Boyfriend and Girlfriend buy a house together.

[sebaco]

Solve this riddle please.

Girlfriend puts down $50,000 deposit.

They split up. Boyfriend leaves after staying in house for 16 months; having paid half the mortgage payments for those 16 minutes - total of $26,000

Girlfriend doesn't get him to sign deed over...

4 years elapse. Girlfriend meanwhile makes all payments.

Boyfriend is facing bankruptcy. Transfers his 50% share to Girlfriend (as he hasn't lived there in years), waits a couple of months, files Chap 7.

Trustee says "she will have to look into this further...."

Total amount paid into home girlfriend $210,000, boyfriend $26,000. Approx equity $50,000 (as home prices have dropped)

Any guesses what happens next? I fear they may come after my ex-girlfriend or dismiss my case. All the above facts are 100% true.

[Flamingo]

Well if you transferred your interest in the house and a new deed drawn up in your girlfriend's name a few years ago you probably would not have an issue but I believe this transfer was fairly recent so you could file. The trustee senses fraud and will probably request a lot of information. Best of luck to you.

[frogger]

Boyfriend is facing bankruptcy. Transfers his 50% share to Girlfriend (as he hasn't lived there in years), waits a couple of months, files Chap 7.

Regardless of how true the situation is, the trustee most likely is going to void the transfer of property and seek to recover all funds that can be recovered.

The transfer within a couple of months was a big no-no.

[SMinGA]

I have not read the other replies - but it does not matter who paid in or who lived there when. Boyfriend owned $25k in equity in the home and gave it away. Trustee can and most likely will go after it.

[sebaco]

sure, but how? what means might they take?

I have $0 plus owe the IRS $7k. I suppose they could go after the co-owner compel her to sell her share of the home?

just trying to visualize what steps they may take.

should I re-affirm the debt? would that matter?

[SMinGA]

Worst case scenario? Possibly force the sale of the home, she gets 1/2 the proceeds and the court takes your 1/2.

Or you may be able to work out a deal to pay the trustee $X to settle it possibly by making payments over 6-12 months. Assuming deductions for realtor & atty expenses and typical selling costs, the sale would not actually generate a $50k profit. Not to mention it takes time to sell a house and depends on the market. As to what amount you would need to offer, discuss with your atty. Probably at least 20-30% of your 1/2 of the equity I am guessing though, if not more.

[sebaco]

That would be something to witness..."forcing" a 50% owner who has made 90% of the payments (including improvements, property taxes and insurance) to sell in this market. She would definitely lawyer-up to fight that b.s.

Does it matter if I re-affirm the house debt? Since I haven't lived there in 5 years it's not an exempt asset, simply an asset that I didn't consider mine in any way shape or form.

Finally....should i try to "explain" all of this to the Trustee via email? I've been copied on a few items and have her address.

[Flamingo]

That would be something to witness..."forcing" a 50% owner who has made 90% of the payments (including improvements, property taxes and insurance) to sell in this market. She would definitely lawyer-up to fight that b.s.

Does it matter if I re-affirm the house debt? Since I haven't lived there in 5 years it's not an exempt asset, simply an asset that I didn't consider mine in any way shape or form.

Finally....should i try to "explain" all of this to the Trustee via email? I've been copied on a few items and have her address.

You don't seem to understand what you just did...the trustee doesn't care how much or what anyone paid in the house, your name was on the deed until a few months prior to you filing Chapter 7. The trustee will not respond to you directly; If you are represented by counsel he will talk to your attorney. Did you file pro se or have counsel? If you have an attorney, you should be discussing all this with him/her.

[sebaco]

Yes, my lawyer is advising I wait before I reaffirm the house.


The WHOLE reason for transferring the deed and for me to reaffirm is to ensure she can stay in the house. I almost ruined her when I moved out and now given the favorable interest rate on the house (it's around 3%) she can afford to stay.

[frogger]

The WHOLE reason for transferring the deed and for me to reaffirm is to ensure she can stay in the house.

Once again, that would be a very foolish thing to do. LISTEN to your lawyer.

[sebaco]

Thanks for the feedback. What's troubling is that the lawyer predicted (before ever filing) that the trustee wouldn't attempt to collect on "half a house", owned by other parties.

Meanwhile, my ex-girlfriend, stunned by these events (she didn't know anything until I filed) is lawyering up herself.

Fun times.

[SunshineGal]

If I was your EX, I would get myself a good attorney. I would also start paper trailing the down payment and last four years worth of cancelled checks showing the payments were made from her own funds.

As for reaffirming the mortgage, why would you reaffirm the debt on a property you no longer own?

[sebaco]

As for reaffirming the mortgage, why would you reaffirm the debt on a property you no longer own?

Well, she called me in a panic a couple of weeks ago and said "the house is in bankruptcy, what have you done?!" She then called the bank and they said she would have to give up her very favorable interest rate (around 3%) and refinance around 5% unless the house was pulled from the bankruptcy.

Very, very cloudy situation. Not sure who to believe. I certainly don't want to cause more financial strain from her.

And "yes" I understand the risk. However she has committed to selling the home as soon as kid graduates from college. And "yes" i plan to get all of this in writing.

[SMinGA]

If you were both on the note, then your filing BK would not have a long term effect on her obligation to pay it. Yes, she could refinance to have it in her name only - but that is pointless. Your obligation to pay the mortgage will be discharged. Hers will not be. The loan rate does not change because of the BK filing.

The problem is not with the mortgage (obligation to pay). The problem is with you 'giving away' your ownership interest.

[sebaco]

So if I could go back in time I should have placed my 50% interest into the bankruptcy instead of signing a warranty deed transferring my half? I thought by doing this I would, in affect, be deeding my portion to the State, instead of the rightful owner....

Given that I've had the 341 hearing and the trustee announced her intention to look into this further, should I sit on my hands or activate my lawyer to try to reverse the action?