For most of us, when we are considering bankruptcy filing, we are clear on what we own and what we want to protect. But you can get caught with some unexpected news if you don’t do your due diligence before filing for bankruptcy or making changes in something as important as your home’s ownership. This may include telling family what you plan to do. Here is a good example of why this is important.
A Tale of Two Families
An elder couple wanted to plan for their eventual need to move to a nursing home. Their house was paid off and they wanted to be sure that when they were ready to move, they wouldn’t have to worry about losing their investment if something should happen. They decided to transfer the deed to their home into their son’s name. The only problem is, they didn’t tell their son about this.
Meanwhile, their son and his family were having financial problems and because he was embarrassed by it, he didn’t tell his parents. In the end they decided to file for a Chapter 7 bankruptcy so that the medical and credit card bills that were at the root of their financial problems could be discharged.
Bankruptcy Filing Chaos
Of course, when the young couple filed for bankruptcy they didn’t list his parent’s home as an asset, and so they were unable to have it listed as an exemption. Worse yet, it could be seen by the courts as a deliberate attempt to shield the property and that offense could lead to criminal charges.
They could have saved them and their attorney some real panic and problems if the parents had told their son they were making this change. It probably wouldn’t have hurt for the son to admit to financial problems as well.
Trustee Ownership Rules
The worst possible scenario was that the trustee of the bankruptcy could easily have taken the house over since the property was not protected in the bankruptcy. Luckily a way was found to not have this happen, but this could have easily not been the case.
Bankruptcy Filing Requires Diligence
This story simply illustrates why it is not a small decision to file for bankruptcy. No matter what your situation, make sure you have all the facts and have talked this over with family before deciding on a Chapter 7 bankruptcy filing. Having an experienced lawyer such as Robert Peters to go over all possibilities will help. If you don’t know what to expect in a bankruptcy you can learn by downloading our free eBook Myths, Secrets and Truths about Bankruptcy in Florida. Don’t walk into your bankruptcy unprepared, get the information you need. Check out our site for more information or call and make an appointment today.