Legal Question in Bankruptcy in New York

Spouse Bankruptcy

I purchased a home in 98, my name alone is on the loan. I quit claimed the property to my wife after the purchase. She now has incurred a credit card debt in excess of $40,000. I am not a cosigner or addtional cardholder on any of her accounts.

She is going to file a 7 bankruptcy petition soon. I have asked and she has agreed to reverse the home deed into my name prior to her filing.

Would this be consider a fraudulent conveyance? Is a house even reviewed by the trustee if the debt to be discharged is not secured by the home? There is no intent to hide assets. Will any of her creditors be able to attach any of my property if I am not a part of her credit card debt?

Is there any exposure to me with her debt or Bankruptcy filing?


Asked on 10/23/02, 7:59 pm

2 Answers from Attorneys

Eric Kochel The Law Office of Eric David Kochel, Esq., P.C.

Re: Spouse Bankruptcy

If your wife files a Chapter 7 you may not be liable for any debts that are only in her name. (However, her monthly budget (income and expenses) must be listed in detail and include any contribution from you as well as any joint bank accounts, investments, insurance policies, etc.)

And -yes! the deed transfer could possibly be construed as a fraudulent transfer - especially if there is equity in the property. This may be included in her bankruptcy estate and the trustee could possibly sell it to pay off her credit card debts if there is enough equity (less your homestead exemption). -Eric Kochel Ph:(718) 935-9079

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Answered on 10/24/02, 12:15 pm
Lance Spodek Lance Roger Spodek, P.C.

Re: Spouse Bankruptcy

It is presently here house. If she transfers it to you the Trustee may recover the property from you to sell for the benefit of her creditors. The real issue is does the property have any equity? If not, or minimal, no problem.

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Answered on 10/24/02, 1:05 pm


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