Can I incorporate residential property to save from being taken as income for another property in bankruptcy?

Question

I own my home. My mom passed away in January. I now own her home. My dad has a home he placed in my name at the time of purchase in 1990. I have never lived there and am not responsible for the home. Dad, recently diagnosed with dementia, has not paid the mortgage for 4 months. Can I file bankruptcy on Dad's property? Save my home and save the home I received from my mom. Mom's home is paid for and mine is not. Dad has to move to assisted living. We tried selling dad's home 4 times already. I am on disability leave from work and cannot afford three homes.

Answer 1

For bankruptcy you cannot pick or chose what to include, it considers "all" of your debts and assets.  So you will either need to bring the mortgage up to date (if not too late), sell one or two of your homes, or let the one dad was using go into foreclosure.

However, since you did not live in dad's home, you might not be excused from a foreclosure deficiency (if it auctions less than loan balance, you may still owe), or if if any deficiency is forgiven, you would owe income tax on it.

Answer 2

You need not form a corporation to protect your home in the event your father's home is foreclosed on even though the house is in your name.

You may form a corporation and place any assest you want in the corporation, but in this case it is not necessary in my opinion.

The lender will simply foreclose on the house that is in foreclosure. They will not go after your mother's home nor your home since you did not place them up as collateral when you signed loan docs for your father's home in 1990. The only collateral is your father's home as collateral.

You should call the mortgage company and explain to them the situation you are in since your father is now in an assisted living home, and that you are not able to pay the mortgage since he was making all the monthly mortgage payments.

You might even send them a copy of the listings you made in your attempt to sell the property and other information you might have to show your attempt at disposition of the property.

They could offer remedies for you that you are unaware of.

#1 Deed-in-lieu-of foreclosure

#2 Payment modification

#3 Short sale

#4 There might be others that they might discuss with you.

When you call make sure you ask for and don't get off the telephone until you have spoken with someone from the "Loss Mitigation Department"

You might file for bankruptcy on your father's home, but that would cost legal fees and the ultimate result is you are still trying to get rid of the home, this will only prolong the procedures.

You might want to run this by your attorney or one referred to you by relatives or friends since I am not an attorney. Normally the first consulation is free.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 3

lower the price on dads' home till you have a buyer