Posted on: 07th May, 2009 12:01 pm
My mother has a loan on her business with an outstanding balance of $150,000. I am a co-signer on the loan. However, she placed her house up as collateral on the loan.
The business is now failing. My mother is trying to sell her house so she can pay off the loan. We are unsure if the sale of the house will be enough to cover the $150,000 owed. It is my understanding that if the bank cannot get the $150,000 from her, they will come after me for the rest of it.
My husband and I own a house but only he is on the mortgage. Is it possible for me to Quit Claim the house to him so my home will be protected?
All of the business loans are current and no bankrupty proceedings have been started by my mother. She knows that her business will not recover and is trying to settle the loan with the sale of the house.
There is a good chance that the sale of the house will cover all loan expenses. I am just trying to be proactive to cover worst-case scenerios.
Thanks!
The business is now failing. My mother is trying to sell her house so she can pay off the loan. We are unsure if the sale of the house will be enough to cover the $150,000 owed. It is my understanding that if the bank cannot get the $150,000 from her, they will come after me for the rest of it.
My husband and I own a house but only he is on the mortgage. Is it possible for me to Quit Claim the house to him so my home will be protected?
All of the business loans are current and no bankrupty proceedings have been started by my mother. She knows that her business will not recover and is trying to settle the loan with the sale of the house.
There is a good chance that the sale of the house will cover all loan expenses. I am just trying to be proactive to cover worst-case scenerios.
Thanks!
first off, it's just my opinion, but i think you aren't in jeopardy of losing your home to begin with. that being said, a creditor who suffers a loss in a transaction that you are a party to could seek a judgment against you for that loss.
assuming the creditor obtains a judgment, they could then enforce it by placing a judgment lien on the property that you own. that would ensure payment to them in the event you remortgage or sell the home. foreclosure would not be an option on their part - they'd simply wait patiently for their money.
as for a quit claim transaction from you to your husband, my thought on that is you'd not be in jeopardy. obviously you'll want to be certain that there are no proceedings taking place prior to that transfer (bankruptcy, what have you).
i believe your worries are unnecessary.
assuming the creditor obtains a judgment, they could then enforce it by placing a judgment lien on the property that you own. that would ensure payment to them in the event you remortgage or sell the home. foreclosure would not be an option on their part - they'd simply wait patiently for their money.
as for a quit claim transaction from you to your husband, my thought on that is you'd not be in jeopardy. obviously you'll want to be certain that there are no proceedings taking place prior to that transfer (bankruptcy, what have you).
i believe your worries are unnecessary.