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Tina
Tina, Lawyer
Category: Legal
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Experience:  JD, BBA Over 25 years legal and business experience.
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Our nephew's wife ran up an American Express card to 50K and

Customer Question

Our nephew’s wife ran up an American Express card to 50K and she is now unable to repay it. Card is in her name only. She and our nephew own their home located in the state of Washington. The title is vested as community property. Down payment and mortgage payments were made from earnings from both of them.
So far, American Express has not obtained a judgment against her, but they are threatening to. To protect our nephew’s interest, we would like to convert the ownership to tenants in common. Our plan was to have he and his wife sign an agreement saying that each owns a one half interest. Then to have them execute a deed to themselves as tenants in common, each with a one half interest. Should we do that, would his half interest be protected?
Submitted: 1 year ago.
Category: Legal
Expert:  DrakeLAW replied 1 year ago.

Hello and welcome to JustAnswer, my name is ***** ***** I am an attorney. Please note:This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

I am sorry to hear about the situation. Unfortunately changing the ownership of the real property to tenants in common will not protect his half-interest. Due to community property laws, the marital community will still own that half interest that you are identifying as his and it can still be pursued by creditors. Actually, one thing that could be done is switching to tenants in common and then having his wife deed the half interest to him as his sole and separate property and she would have to also record a spousal waiver. The problem is, that would technically be construed as a fraudulent transfer since the community didn't receive anything in return and a creditor could pursue claims to "undo" that transaction. With that all said, in my experience, American Express would not be that aggressive in pursuing that unsecured claim. Is there equity in the house?