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is it legal to do refinancing before bankruptcy?

Posted on: 08th Sep, 2008 03:03 am
my husband may opt for bankruptcy and we have a house both in our name (mortgage and title). we have equity in the house (probably a little bit more than the excemption-but house in my neighborhood have decreased a lot in price). but i want to just refi in my name only to cash out some money and use it to pay some debt. if i refi with my husband it will not get approve because of his low credit rating. i have very little debt and with good credit scores. but i need cash too. will this have any effect just in case my husband declare bankruptcy?
if your husband files bankruptcy chapter7, then depending upon the state, it would affect your home. so, it's better to take your husband's name off the house. then you can refinance the loan only in your name.
Posted on: 08th Sep, 2008 03:36 am
Thanks Sarah,
how do I take off my husband name from the house?
Posted on: 08th Sep, 2008 04:42 am
Request him to sign on a quitclaim or grant deed.
Posted on: 08th Sep, 2008 04:45 am
If my husband file for bankruptcy less than one year from the quit claim or grant deed or refi can lenders/judge still go after the house? thanks again Sara...
Posted on: 08th Sep, 2008 05:03 am
hi jjbenz,

welcome to our community forums.

actually, as per state laws, any transfer of property (through quitclaim or any other deed) within a look-back period of 1 year prior to filing bankruptcy can be treated as a fraudulent conveyance. so, you'd have to check out the state laws with an attorney.

regards,

jessica.
Posted on: 09th Sep, 2008 05:40 am
All lenders will look at title history when providng a new loan. Seeing your husband on title and then off with no viable explanation such as a divorce will raise flags. You will need to qualify for the loan on your own and the lender may see you this as bailing out your husbands BK.
Posted on: 09th Sep, 2008 09:56 am
Hi Matt,

I agree with you in the sense that lenders do check for title history of a property. Hence it'll be easier for them to find out if there has been a transfer of title prior to bankruptcy without a viable reason.

By the way Matt, it's nice to have you here. :)
Posted on: 11th Sep, 2008 12:56 pm
I am now in the process of refi and pre approve by myself in the loan+ cash out (40% of equity) but I need to remove my husband from the title so I can get the mortgage...can I have him back in title/deed after let say after a year or two? Is it really necessary to remove him from title?...
Posted on: 15th Sep, 2008 04:55 am
This can be done by the title company at the same time that you close on your loan with the lender. Some lenders may require you to do this before hand but many do not. So if your lender is requiring that you do this first, then contact the title company that will be handling the transaction for you. And yes, you can add him back onto title at a later time. There is no waiting period. If it were me and he was filing bk, I would remove him from title. If the mortgage is going to be only in your name, there would be no benefit for him to be on the title at this time.
Posted on: 16th Sep, 2008 11:19 pm
My ex just filed bankrupcy my name unfortunately was still on some loans as a co-signer. He wasn't able to afford to refinance to get my name off. So am I going to be responsible for all this debt, including his home that my name is still on??
Posted on: 17th Sep, 2008 08:41 am
Hi Jennifer,

if your name is there on the loans, well, you'll have to pay them off or else the creditors would take the required legal action. By the way, what type of loans do you have? are they all unsecured debts?

Has the mortgage been included in the bankruptcy and are you there on the mortgage? What type of bankruptcy is your ex filing? If it's chapter 13, you'd be able to save your home. Please clarify what type of bankruptcy your ex intends to file, so that I can help you with some concrete suggestion.

good luck
Posted on: 18th Sep, 2008 06:23 am
My ex is filing chapter 13.
Posted on: 19th Sep, 2008 05:17 am
filing a chapter 13 means you will be able to reorganize your debts. you will be able to negotiate with the loss mitigation department of the bank and they will come up with a plan by which you will be able to payback the loan within a time frame of 3-5 years. as your ex is filing a chapter 13, you will be able to save your house.
Posted on: 23rd Sep, 2008 04:47 am
Please Assist,

Husband and wife have undivided 50% interest in the homestead,exemption unlimited. Husband thinking bankruptcy wants to refinance in Wife's name to lower payments but after refi wants title as 50% sole seperate to husband and 50% as Wife's sole seperate property. Is this considered a transfer under Federal Bankruptcy provisions and causes a cap in homestead value at $ 125,000 because it was done 40 months prior to bankrtupcy. 2nd question would you do nothing and refinance as undivided interest ? THANKS
Posted on: 25th Jan, 2013 10:25 am
Hi krs,

Before making any kind of transfer or change in property ownership, immediately before or after bankruptcy filing, you should take the opinion of the bankruptcy attorney. If there are any legal complications, then the attorney will let you know about it.

Thanks
Posted on: 27th Jan, 2013 11:12 pm
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