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If we "walk away" from from the house now, and our parents give us 100,000 as a option deposit on a lease purchase house, would the 100,000 be able to be seized by the creditor to repay the foreclosure judgement?
A: Once the money is in your possession, it could be reached by a creditor, on the theory that the gift was made to you, and instead of paying your creditors, you chose to effectively assume a new liability.
Should the lease be in our name or our parents for creditor protection?
A: It would be better, certainly, if your parents were on the lease as tenants with you -- that way there is no "gift" of property to you, especially if only your parents have the right to exercise the option to purchase.
If our parents die in 1 year, and our inheritance is 500,000. Could this be seized by the creditor?
If the lease payment is 5,000 and 50% goes to principal reduction, is this a problem for the creditor and can they take action?
A: If your parents are the tenants and have all the exercise and purchase rights, then there is nothing for a creditor to reach, because it's not your deal. You're just a tenant.
Note: Although it might really reek havoc on your lifestyle, there is no law preventing you from taking a sabbatical for a year, filing Chapter 7 bankruptcy after six months, blowing out all the debt, and then reopening your practce.
Hope this helps.
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A creditor can't stop you from renting. You are not proposing a rental. You are proposing a lease option.
The creditor can get a general judgment lien on all your property interests in the county, such that at the instant you exercise the purchase option, the creditor would have the right to force the sale by writ of execution, so as to satisfy its judgment debt.
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