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My friend Bill and his mother(age 78) live in Maryland and

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My friend Bill and his mother(age 78) live in Maryland and have large credit card debt around $75,000. All the credit cards are in mother's name she gets social security of under $500.00 only and has $30,000 in the bank She is not interested in how it affects her ability to borrow money or get other credit cards she plan to go to a senior housing for low income seniors in a year or so. She owns a small home valued at approx. $135,000 it is titled as tenants in common with mother and his younger brother who lives in his own home in MD. My friend Bill is on social security disability since late 1980's and uses her address for most mail SSDI and Medicare claims and udpates. He lives with friends from time to time but his legal address is her home.
She does not have enought money to do a chapter 13 due to her low income. If she transfers her interest in the house to my friend in the next week and leaves current son on deed (meaning both son's on deed) take her name off and just stops paying her credit card bills will they come after the house. Do you advise paying credit cards for a few months? Is there a rule that the transfer must take place year or so before. Also since my friend is on SSDI is there any protection or safeguard. I know it varies from state to state, since my brother is living in Mass and my mother just went to a nursing home and needs longterm care, all her assets went to him. What's the rule in MD? Do we need to do a Quit Claim taking mother's name off property and a No Consideration Inter-Family Deed and name Bill and his brother - do you have any forms and resource for forms? Jane
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  JoeLawyer replied 3 years ago.
Maryland does have a fraudulent transfer statute, called the Maryland Uniform Fraudulent Conveyance Act (MD. CODE ANN., Commercial Law, Section 15-201, et. seq. (1975).

§15–204 says that "Every conveyance made and every obligation incurred by a person who is or will be rendered insolvent by it is fraudulent as to creditors without regard to his actual intent, if the conveyance is made or the obligation is incurred without a fair consideration."

So, if the transfer renders the person transferring the asset insolvent, then the transfer is deemed fraudulent and can be overturned by a court.

Also, §15–205 says that "Every conveyance made without fair consideration when the person who makes it is engaged or is about to engage in a business or transaction for which the property remaining in his hands after the conveyance is an unreasonably small capital, is fraudulent as to creditors and other persons who become creditors during the continuance of the business or transaction without regard to his actual intent."

So, if the person receiving the transfer of property does not pay a fair amount to the person transferring the property, then the transfer may be deemed fraudulent as to the creditors of the person making the transfer.

A good website outlining Maryland fraudulent transfer law is here:

http://secure.bowie-jensen.com/?file=convey.inc

I think you should consult with an Estate planning attorney who can see if transferring the assets into a trust might shield them (though my guess is this will be difficult at this point).

If that doesn't work, a Chapter 13 repayment may be the best option.

Joe

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JoeLawyer, Attorney
Category: Bankruptcy Law
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Experience: Attorney in the practice of Bankruptcy Law since 1996
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