I need to file for bankruptcy. I'm living in a house that is in my name but was paid for by money lent to me by my parents in a formal mortgage. My dad released the lien years ago to avoid any major complications should something happen to them. So, the title shows it as being mine even though I've borrowed against it from them an amount that far exceeds it's value. The loans are in writing. Morally, it's theirs and I'm in massive default since they haven't kicked me out as long as I pay the taxes. Do they have a legitimate claim to the house in my bankruptcy?
Answered on: 12/13/12, 1:17 pm by Thomas R. Morris
Your father's claim appears to be an unsecured claim because the mortgage was released. Therefore, he would not have a claim "to the house" in bankruptcy. Bankruptcy could be disadvantageous to him.
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