[CLBS] Any issue with Debtor's sister buying out Debtor's husband's share of house as part of Debtor/spouse's divorce prior to filing?

[Holly Roark]

Debtor and Husband divorce in April 2021. Debtor's husband wants $50K for
his community share of the mobile home/land. This is a little less than what
his share is worth (Total value about $140K). Debtor is low income and can't
buy him out and doesn't want to sell or move. Debtor's sister steps in and
pays Husband the $50K. Debtor and Husband as Joint tenants grant to Debtor
and Sister the Property, so now Debtor and Sister are on title (I think as
tenants in common since the recorded deed doesn't say Joint tenants. It
doesn't say how Debtor and Sister hold title, but they consider themselves
50/50 owners.). Husband moves out of state. Debtor remains in the property.
Sister lives elsewhere. Debtor does not owe sister any money back. Sister
will remain as part owner of the property.  

I want to add that the grant deed says both, "this is a bonafide gift and
the grantor received nothing in return" but also, "for valuable
consideration, receipt of which is hereby acknowledged." Is that "gift"
language going to cause an issue? It seems to me that Husband was entitled
to his community share of the property and would have gotten it one way or
another, whether the Debtor agreed to sell, or if she had the money to buy
him out, so I'm struggling to see if there is anything about this deal that
a Chapter 7 trustee could exploit. I don't think so, but want to hear your
thoughts. 

Debtor wants to file Chapter 7. I can't think of a reason why the mobile
home/land would be in jeopardy under these facts. The deal looks legit. What
am I missing? 

 

(I should say this is a CA case so the real property laws may be different,
but I still want to hear from you if you see any problems in filing this as
a Chapter 7.)

 

Best regards,

HOLLY ROARK

Attorney at Law 

Certified Bankruptcy Specialist -

By the State Bar of California Board of Legal Specialization

 

ROARK LAW OFFICES

950 Bannock Street | 11th Floor | Boise, Idaho 83702

Phone:  (208) 536-3638 Fax: (310) 553-2601

E-mail:   <mailto:holly at roarklawboise.com> holly at roarklawboise.com 

 

*This communication does not create an attorney-client relationship.

Unless you have signed a retainer agreement with Roark Law Offices, this 

communication may not be private or privileged.