Legal Question in Bankruptcy in California

Not sure why your brother would want to file for bankruptcy if he is going to be incarcerated for 12 years since he apparently has no assets (except possibly the property transferred to your parents). If no judgments are obtained then the statute of limitations would make those debts uncollectible by the time your brother is out of prison.

The transfer of the property to your parents without consideration (no fair market value paid by your parents) is an action that could be set aside by a creditor with a judgment (and the trustee in bankruptcy) if the creditor (or trustee) proves that it was done with the intention avoid paying a debt [this could be considered a fraudulent conveyance and can be set aside within four years]. This ability to set aside a fraudulent transfer applies also in bankruptcy. Therefore, there are issues more serious than just whether or not your brother can attend a meeting of creditors by telephone or by a respresentative (which is possible).

You state that you have no money to pay an attorney but your parents are collecting rent on property that is really owned by your brother. It could be said that your parents are holding the property in trust for your brother. They have legal title but there is a secret trust in effect since the property is actually owned by your brother. Also, the loan on the property is owed by your brother and the bank has a lien on the property for the loan balance. The transfer of the title does not affect the existing lien on the property for the loan.

Therefore, it may appear that your brother wants to keep the property, not pay his creditors and not even pay a lawyer for a consultaton. I suggest you take some of that money from the rent and consult with an attorney before you take any action.

Filing for bankruptcy is extremely dangerous thing to do if you do not know what you are doing and are not dealing with the system with very clean hands. It could also affect your parents. The fact that your brother is in prison is going to raise issues as to his credibility since he has a felony conviction which apparently was for a very serious crime. Therefore, there is from the start going to be a need to be extra careful and disclose everything.

If there is no equity in the property then there should be no problem. However, I am assuming that there was some equity and that the purpose of transferring the property to your parents was to avoid losing that equity (the property) to the creditors. Again, you should consult with an experienced bankruptcy attorney and have all the facts available including the value of the property at the time of the transfer, a copy of the deed and the amount of the liens on it at that time.