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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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If someone is incarcerated, should they declare bankruptcy

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If someone is incarcerated, should they declare bankruptcy? If so, what sort. If they are in Florida will they have to appear at a hearing or can arrangements be made.
They have substantial credit card debt and an upside down mortgage with a second mortgage on a home that they will probably never be allowed to return to. Is it better to declare bankruptcy or simply wait for creditors to pursue you? We contacted a local attorney but they had no experience dealing with a prisoner.

Hi JACustomer,

It is possible, but difficult, to file a Bankruptcy while in jail. Unless the prisoner has significant assets of value - such as a house, or bank accounts - there is nothing the creditors can do while the debtor is in jail.

Accordingly, it is often better to wait until out of jail before filing a Bankruptcy.

 

I think this is what you wanted to know. If not, please let me know.
Thank you!

Customer: replied 5 years ago.
What would be the implications on a shared asset? He holds a third share in another house with my wife and her sister. Could they be forced to sell or would it be better if he deeds over his share. They cannot afford to buy him out and that money would only go to creditors if they did.

1) What is the market value of the home, and 2) what is the balance - if any - of the mortgage?

3) Did he live in that house?

Customer: replied 5 years ago.
The house belonged to their parents and is owned free and clear
Hard to put a value on it in current market. Similar property in same location advertised for $280,000. There is also land attached.

He lived in it as a child but since the parents passed, it has been a vacation home and is now rented to a family.

Unfortunately, his creditors can force the sale of the house to get his 1/3 share. Since he already owes the money, transferring the deed out of his name will not help, as such a transfer can be viewed as a "fraudulent transfer" and can be reversed.

Lastly, since the house was not used as his residence, there would be no homestead exemption available if he filed a Bankruptcy.

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