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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