If my father owns a home that I pay for with him but it is in his name only and he might have to file for bankruptcy, how can we protect the house?
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If my father owns a home that I pay for with him but it is in his name only and he might have to file for bankruptcy, how can we protect the house?
It is a 2-family that we both live in. He has a number of old credit card debts not of his fault even really but there is no way to fix this without a bankruptcy since he has a fixed income. He is not in the best of health and worried that if he dies I will lose the house and vehicle. Is there anything we can do now to help this not happen? If I am named executor and inherit his property will I be forced to sell the house? Can he add my name or transfer the property to me now? Or can he declare bankruptcy now (not the favorite option) Is there an option to put the home in trust? I don’t know how this works either.
Asked on May 27, 2015 under Estate Planning, New York
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
Your father, in his bankruptcy, can protect the home by reaffirmng the debt which means continuing to make payments on the debt.
Your father can also reaffirm the debt on the car in his bankruptcy which again means continuing to make payments. If the car has been paid off, it can be protected by being listed under the automobile exemption in the bankruptcy. Exempt items are not subject to the creditors' claims.
The home can also be protected, depending on its value, by listing it under the homestead exemption in the bankruptcy.
You won't lose the home or car if you inherit these items for the reasons discussed above.
If your father transferred the home to you and shortly thereafter filed bankruptcy, that would NOT be advisable because that transfer of ownership could be deemed fraudulent.
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