Asked 8/26/2009
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Real Estate/Bankruptcy What is the bankruptcy law in AZ regarding selling an out of state property shortly before filing for bankruptcy? Payments have not been made for 2-3 months, is it OK to try to sell the house to cover the mortgageowed and possibly see a bit of profit? If there is a profit made will this be taken from us to pay toward credit card debt?
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Answer 1/1 - Submitted 8/26/2009
I know the answer to this , but it is too complicated and has several but and ifs ; but you can transfer property to non relatives.. I really dont want to give BK advice this general on line. and it depends on what chapter you are filing. have you already filed? what makes you need to do this in 2-3 months?
if you are just trying to reduce your own monthly expediture and are "giving the house away " basically, for what is owed on it, then you should be alright if you don't mention all the warm fuzzy reason you did that.
i do not know what a little profit is or morre imporatnt what the trustee will think " al;ittle profit is"
if you haven't filed , you can continue to do business asusual EXCEPT run up anymore debt. It is really best that you have no new debt for a year before filing; getting rid of debt is another thing
if you "sell" th e house to non relatives for what you owe against it plus a "little " couple of thousand is little for a chapter 7. and you can account to the trustee that this "profit' wen to your hosue payment, medical bills utilities and secured loans , you might be ok
with the new rules , you need to be in the same position you will be when you are ready to file, BEFORE you talk to the BK attorney; in other words after you talk to him, you cannot move any property thoguht the rules do not state this exactly, it is just way better for everybody. any unsecured loans that you pay in the last 90 days before filing might have to be returned to the trustee ( hint hint)
you should google BK advice online and read everything you can especially about the means test for chapter 7
I am sure this is as clear as mud
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