If my stepfather owns less than 2 acres of land deeded as a life estate with the remainder interest held by me, can the land be in jeopardy if I file Chapter 7?
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If my stepfather owns less than 2 acres of land deeded as a life estate with the remainder interest held by me, can the land be in jeopardy if I file Chapter 7?
Asked on June 6, 2012 under Bankruptcy Law, North Carolina
Answers:
Rebecca Coleman
Answered 12 years ago | Contributor
If you file for Chapter 7, your remainder interest would be considered an asset, which could be sold to pay off creditors unless it is exempt. That means your stepfather would be able to continue living on the land and would retain ownership during the term of his life estate, but that the remainder interest could be sold to someone else. The value of the remainder interest is determined by several factors including the age of the person who holds the life estate, and whether the person holding the life estate has the power to sell or mortgage the property free of the remainder interest.
There is a good chance that you may be able to exempt some or all of the property under state law, keeping it safe from creditors, but this is actually a complicated issue and one I would definitely recommend you discuss with an attorney in your state.
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