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Roger
Roger, Attorney
Category: Bankruptcy Law
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We own our personal home outright. It is worth 200,000. We

Customer Question

We own our personal home outright. It is worth 200,000. We are signed on two other homes, we did loans on to build and then sell. They are now built and could not sell and they are now foreclosing on those two homes, we could not sell them with the market being down, we will owe large defiencies. If we sell our current house for cash, then give our kids the cash as gifts (we have 6 grown kids and can jointly give them all $24,000 each). will that at least protect that cash.. as we believe they will be coming after our home, as we have equity in it, and that way we at least gave money to our kids for their current college. We live in Utah. My mom said she will buy the home from us, as she can get a loan from a bank. She then will rent to us. She will own the home, we will pay her rent, but at least we will have the $185,000.00 she buys it for. The title will be in her name with a mortgage, and we will have money for the kids as gifts? Will they be able to take the home or cash?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Roger replied 5 years ago.
Under the Utah fraudulent transfer act, both of these actions would be presumed fraudulent and could be reversed and cancelled in order to allow the creditors to satisfy any deficiency. The full law can be found here: http://law.justia.com/utah/codes/title25/25_02.html

You should not do this.

Also, Utah has a homestead exemption for up to $20,000 in value - area limitation of 1 acre Utah Code, §78-23-3. Thus, there is not much protection there.

Your best bet is to try and work out a settlement with the creditors after the foreclosures take place. Any transfers you make at this point will only increase your legal problems.

Customer: replied 5 years ago.

Neither of the two banks have filed for foreclosure on us as of yet, and it looks like it would be awhile until they would, if they did. The reason we have thought to do this, is because we already owe my mother over $100,000.00. This way we could pay her back, as well as rent from her.

We are not trying to be fraudulent, we are just trying to get her paid. She will have a mortgage from a bank - and so if they reversed the sale, how would the bank that now has the mortgage be handled, as they would be a lien holder on the home. and by the time bankruptcy started, our kids would have spent much of the money on college. Also, one of the homes in in Missouri - can they go after deficiencies in Missouri?

 

Thank you

Expert:  Roger replied 5 years ago.
Like the law says, the transactions are presumed fraudulent and it is your duty to prove they weren't. It is up to you to decide whether you can justify your actions.

In Missouri, deficiency judgments are not generally allowed when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. The laws that govern Missouri deed of trust foreclosures are found in Chapter 443.327 Missouri Revised Statutes.   
   
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 26000
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by West
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Customer: replied 5 years ago.

We have proof that we owed money to our mom, from personal loans she gave us throughout the years. We have the paperwork, dates, etc. when she gave us loans. She would also be buying the home for close to the current appraised value, plus she said that she will be charging us rent. We pay no rent now, we will have to pay her rent, and so there is no gain in that for us.. other than paying off some debt.

The sale to her already went thru last week, and so the bank actually owns the home now. We hope this will not cause any trouble, as we just wanted to make sure she is paid. She is charging us 1500.00 a month in rent, starting this month. Guess, we just hope they will see that we did not do it for gain, but to pay a debt.

As for Missouri... so you said that they do not go after defiencies?? If this is the case, we may not have to worry, at that home is the most expensive... and will only have to worry about the Utah new home.. as we were told they go after defiencies. Are you sure about the Missouri defiency thing??

 

Thanks so much

 

 

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