Legal Question in Bankruptcy in California

Re: Bankrupcty and Quick Deed

It depends on how long ago the transfer occurred and if the deed is recorded. Bankruptcy law and state law allows creditors and bankruptcy trustee to sue for the recovery of property that was fraudulently transfers to keep it away from creditors.

If the deed was recorded a long time ago, then the sister-in-law should be OK. The more recent the transfer, the more likely that the property might be at risk in terms of it being an asset of the brother's bankruptcy. Even if the propert is sold, the sister is entitled to keep her share of the profits and equity. She may also be entitled to setoff against the brother's interest for not making any of the payments (if the transfer is held invalid).

Regardless of what happens, sister should immediately consult her own bankruptcy attorney to determine what rights she has under the current circumstances. But if the deed was recorded years ago, I respectully disagree with the other attorney's opinion.

Re: Bankrupcty and Quick Deed

I must have misunderstood the previous question, not knowing the perspective from which you were coming. Mr. Starrett is absolutely right in his analysis. If transfer was a long time ago, sister will continue to pay on the property and the property will remain in her name. The only issue may be the mortgage lender. Upon whose credit did it rely when it issued the loan, anyway. Obviously, since sister has been making all payments and, if provable to the mortgage company, it shouldn't be a problem in any case.