Legal Question in Bankruptcy in California
Can a house be put in my name if I filed bankruptcy 7 years ago?
My mom filed bankruptcy 7 years ago. Her and my gramma live together and my mom's name used to be on my gramma's house. Due to my mom filing bankruptcy, my gramma took her name off the house. It's been 7 years and my grandma would like to put my mom's name back on the house. Could there be any legal issues if this happens? Could they come back to my mom demanding their money back if she has a house put into her name?
2 Answers from Attorneys
Re: Can a house be put in my name if I filed bankruptcy 7 years ago?
Creditors' debts included in the bankruptcy were discharged in the bankruptcy. They could not come after newly acquired assets so many years later.
Your grandmother would be wise to consult with an estate planning attorney, however, before she again changes the deed to her home.
Re: Can a house be put in my name if I filed bankruptcy 7 years ago?
What your mom and grandmother did is called a fraudulent conveyance. Had they been caught at the time your mom filed bankruptcy, the trustee in bankruptcy would have taken the house, sold it and distributed the money to the creditors. However, the statute of limitations for a fraudulent conveyance is probably 4 years. And the statute of limitations for fraud is 4 years from the date of discovery of the fraud. So, it is theoretically possible that a creditor could reopen the bankruptcy case on the grounds that a fraud was committed and that they did not find out until recently. However, it is pretty unlikely this will happen. Your mom's creditors have probably written the debt off their books years ago and have probably reported a loss to the IRS. Whether your mom now acquires title now is irrelevant as that does not change in any way what happened 7 years ago. Your mom may want to do some estate planning before she acqures title again. Also, should your mom file for bankruptcy again, there could be issues regarding the prior bankruptcy.
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