WhatamI allowed to dowith my rental properties before filing for Chapter 7?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
WhatamI allowed to dowith my rental properties before filing for Chapter 7?
My wife and I own 2 rental properties and will be filing Chapter 7 soon to get rid of our unsecured debt (around $60K). One of our properties is on a lease-option contract, the other is being rented out. They both have very little positive cash flow and I really don’t want to kick the tenants out if we lose the homes (as we’ve been told we will). Is there a way to legally deed these properties over to the tenants that won’t get us into trouble with the bankruptcy court here in CO?
Asked on January 27, 2011 under Bankruptcy Law, Colorado
Answers:
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 13 years ago | Contributor
You can sell the properties for fair market value, but other than that, the answer is a very clear "no." If you transfer the properties for less than fair market value, the Trustee in your bankruptcy will sue whomever you transfer the property to, for the amount of value transferred. And it could result in a denial of discharge to you (in extreme cases).
You will only lose the properties if there is equity in them beyond available exemptions, most likely under Colorado law (assuming you have lived in Colorado for the past 2 years. You need to consult with an attorney in Colorado about your options and risks.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 13 years ago | Contributor
You can sell the properties for fair market value, but other than that, the answer is a very clear "no." If you transfer the properties for less than fair market value, the Trustee in your bankruptcy will sue whomever you transfer the property to, for the amount of value transferred. And it could result in a denial of discharge to you (in extreme cases).
You will only lose the properties if there is equity in them beyond available exemptions, most likely under Colorado law (assuming you have lived in Colorado for the past 2 years. You need to consult with an attorney in Colorado about your options and risks.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.