Property transfer, discharge and 1 yr later lawsuit

[CRedman13]

My husband and I filed bk in 10/5/10. We had done a property transfer to my parents over a year before, of a paid for vacant piece of land that they purchased, but put in our name to use as collateral in a farm loan. We didn't end up getting the farm loan and transferred the land back to them.

More than a year later we filed bk, were discharged in 1/11 and thought this was all done. The trustee was not at all concerned about the land. He asked us about it, we answered, he looked into it and gave us a discharge.

Now this week my parents get a lawsuit from one of our past creditors...the creditor on a house that is finally foreclosing a year later after the discharge, that we let go of in the bk. They want the land from my parents.

Our attorney told us when we filed that we were within the statute of limitation when we filed and not to worry. He spoke with the trustee with us and everything seemed fine, but now what? Can the creditor sue a year after discharge? Will they possibly have to give the land to creditor?

[tobee43]

just to be clear on this....the creditor that is suing your parents is the creditor for the HOUSE that you listed on your bk??? and THAT creditor or bank, that had that house, is now seeking that land that you deeded back to your parents as payment for the house you listed and was discharged on your bk???

[despritfreya]

I'm with JB. Your post does not make sense:

1. Why is a creditor of yours suing your parents?
2. Why is a creditor of yours seeking to recover property titled to your parents?
3. Did this creditor have a mortgage against the property and is now seeking to foreclose its lien? Nothing wrong with that if payments are not current or there is a valid and enforceable "due on sale" clause.
4. Get a copy of the Complaint so that you can read exactly what the cause of action is about.

Let us know the details so that we may try to help.

Des.

[AngelinaCatHub]

I'm with JB. Your post does not make sense:

1. Why is a creditor of yours suing your parents?
2. Why is a creditor of yours seeking to recover property titled to your parents?
3. Did this creditor have a mortgage against the property and is now seeking to foreclose its lien? Nothing wrong with that if payments are not current or there is a valid and enforceable "due on sale" clause.
4. Get a copy of the Complaint so that you can read exactly what the cause of action is about.

Let us know the details so that we may try to help.

Des.

Des, I don't see JBs post. Perhaps you meant TBs or tobees?

I agree, the land was not owned by the OP at least before the bk and then during the bk it was parents land transferred back to OP for collateral on a loan that did not go through then put back into the parents hands.

What claim does a discharged creditor have on this land. Much more explanation before anyone can help them. 'Hub

[tobee43]

TB JB....LOL! close enough right hub? it does get a bit confusing. des most likely needs a bit more coffee this morning

[despritfreya]

TB JB....LOL! close enough right hub? it does get a bit confusing. des most likely needs a bit more coffee this morning

Not coffee. Tea. In fact was sipping some great stuff. Must have gone to me head. . .

Des.

[tobee43]

Not coffee. Tea. In fact was sipping some great stuff. Must have gone to me head. . .

Des.

LOL! des, if the tea is that excellent, please pass it this way. it may increase by typing abilities

[CRedman13]

just to be clear on this....the creditor that is suing your parents is the creditor for the HOUSE that you listed on your bk??? and THAT creditor or bank, that had that house, is now seeking that land that you deeded back to your parents as payment for the house you listed and was discharged on your bk???

Yes tobee you are correct. The creditor is for my house and they are going after my parents for land we transfered back to them over a year before we filed bk. The land the creditor is after is next door to the house but is not connected legally.

I am sorry it is so hard to understand. I guess my biggest question is "if the bk has been discharged can a creditor come after us or my parents at this time or is there a limit to the time they can sue us?" They are not suing us because the land is in my parents name, so I believe they are going after it as the only asset they see available.

[tobee43]

CRed, that's ok, i'm certain, for you sake, and just to get the best response possible, was wanting to make certain about the facts of the situation.

i going to say, and i know des will give you are more definitive answer, that, if this debt for your house was in fact included with the discharged and you also received an order for the close of your bk, one would say this creditor would be in violation of the bk order of discharge and close and can be held liable for attempting to collection a debt that was court ordered as discharged.

the creditor has no right to turn a closed case into an asset situation. they had plenty of time to fight this when you filed your petition.

[AngelinaCat]

The creditor may be going after that piece of vacant land because it IS next to your house. The creditor may be thinking that resale chances of your house will be enhanced if they can get that piece of land, and then knit the two parcels together.

[tobee43]

The creditor may be going after that piece of vacant land because it is next to your house. The creditor may be thinking that resale chances of your house will be enhanced if they can get that piece of land, and then knit the two parcels together.

ahhhhhh, that's interesting? but you think legal?

[AngelinaCat]

Whether it is 'legal' or not will be interesting to watch. The creditor may be trying to 'push the envelope' to see what he/she can get away with. There have been some interesting cases lately involving 'eminent domain', where a person has had his property condemned and seized and transferred to another entity.

[tobee43]

wow...yes, it will be most interesting. i thought eminent domain only had to do with state or government seizures, now i guess the banks are trying it? and, the what if question.

what if eminent domain where at issue here, would there not have been some type of previous notification to the OP or their parents, at some point?

[despritfreya]

This still does not make sense to me.

1. Were your parents co-signers on the loan? Your discharge protects you, not them.
2. Is the creditor asserting that the land next door is part of the collateral securing a loan? If so, did the lender have a mortgage/deed of trust against the property? We need to know why the creditor is attempting to foreclose on or take the land.
3. Is the law suit in state court or in the bk court?
4. Is the cause of action based upon the transfer to your parents - a "fraudulent conveyance" - which, inside of the bk, can only be brought by the Trustee but, outside of bk may be a different story but would make no sense if you obtained a general and full discharge -
5. Did this lender file a 523 action against you in the bk and win thus the debt to it was not part of your general discharge?

We simply do not have enough detail to explain how or why the land and/or your parents are involved. The devil is in the details.

Des.