Legal Question in Bankruptcy in Iowa

purchasing real estate prior to bankruptcy

I have a family member who has requested that I purchase their home prior to their filing for bankruptcy. They are willing to ''gift'' the equity in the property, and the mortgage would be refinanced in my name. Is this an option, or can the bankruptcy proceedings require payment from the equity in the home (even though it has been refinanced and everything is in my name)? If so, how long would it be until the property is considered ours ''outright'' without having any financial ties to my relative?

Asked on 3/22/08, 6:38 pm

1 Answer from Attorneys

Nancy Delain Delain Law Office, PLLC
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Re: purchasing real estate prior to bankruptcy

Bankruptcy judges and trustees can look back to the time prior to filing to see financial and real estate transactions that happen within a certain period of time between relatives. If such a transaction has occurred within the look-back period, the Trustee can demand that the relative forfeit -- turn over to the bankruptcy court -- the property that the debtor assigned to the relative.

The look-back period is long for transactions between relatives.

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.

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Answered on 3/25/08, 3:39 pm

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