Legal Question in Bankruptcy in Massachusetts
Bankruptcy and property liens
I own a $300,000 home. My 2nd husband and I have been married for several years. We had always planned that when his youngest child turned 18, I would add him to the deed for my property. Last year this birthday occurred. At that time I found out that my husband was much more deeply in debt than I had thought--credit cards, car, boat, etc. I told him I no longer wanted to add him to the deed because I was concerned that if he filed for bankruptcy, I would have a lien on my home. He claims that if he filed for bankruptcy, the first $250,000 of his assets would be protected, so my house would not be at risk. He works two full-time jobs to keep up with his bills and I'm concerned that it could all fall apart for him so easily. What are the general risks involved if I add him to my deed?
2 Answers from Attorneys
Re: Bankruptcy and property liens
If the house as always been in your name, I would maintain the status quo until your husband addresses his financial situation. Actually, the homestead exemption in Massachusetts is $500,000.00, but it may not necessarily allow you this full amount if you transfer the house from yourself to you and your husband. Moreover,while your husband's creditors could attach the house and not force a sale, why would you want to expose an asset that is currently not subject to their claims to their claims. I do not believe conveying an interest in your house to your husband would be at this point prudent. I would be happy to discuss this situation with you and your husband further. I offer a no cost thirty minute consultation. My recommendation would be for your husband to consider a bankruptcy filing before you do anything with the house.
Re: Bankruptcy and property liens
I think your husband's wrong on this one. Under the new bankruptcy laws, any interest in real estate that he "acquires" in the 1215 day period prior to filing bankruptcy is limited to $125,000 - not the $250,000 he claims, and not the $500,000 Massachusetts Homestead Statute. So to answer your question, assuming there is 100% equity in the property, there is substantial risk in conveying an interest in the property to your husband.
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