A nightmare! My husband’s mother sold him a home for $1 twelve years ago. In that time he took out two loans on the property. He paid the taxes (missing two years and in the rears on that-different story) He lived in the home when he purchesed it an until march of 2010. In 2007 he declaired chapter 13 bankrupsy. With two years left the following has occured:
She is claiming a life estate. In the deed i found a clause stating she was given a life estate followed by a clause that she would warrent generally the property to him and they would both live in the home.
Life estate issue: lawyers advised us to stop paying taxes and mortgage to end the relation. He no longer wants the home due to the harrasment by her.
We wish to walk away with a car and two boats. The bank is begging us to work it out. The bankrupsy lawyer is not helping us determin what to do.
I have gone to the county, insurance and taxes, they all say its his home. They find him the person responsible for all of the above.
His goal after months of discussion is to end the commitment to the house. He no longer wishes to keep it. He would need his car and the boats are simply all he has left.
1. How on earth did the banks miss a life estate? They review the deed/title to land and home?
2. Can he convert to a ch 7 and retain car and boats (as value goes they are combined value of about 7k) car as far as I can tell would be pd off in two years. He is current.
A Life Estate, well there is a term I have not heard in a long time. For those that are not familiar with a life estate here is how it works. Let’s say Mom – A wants to sell her home but stay in it. So she sells it to son – B. B now owns the home and is responsible for all taxes, insurance, etc. but as long as A is alive she has life tenancy to stay in the property while she is alive. Upon the death of A the property passes to B outside of probate.
I’m not confident the bank missed the life estate is they were making a loan to your husband based on his credit. He can still pledge the home as collateral for a mortgage, it’s his home, she just gets to have full use and enjoyment of the property while she is alive.
If the relationship between your husband and his mother is permanently broken and you are unable or unwilling to reach some sort of arrangement then one option is to dismiss his Chapter 13 bankruptcy and then stop paying the mortgage and all other obligations for the property. The home would be foreclosed on and Mom would get booted out on the street. After 180 days he could file for a Chapter 13 again, this time including his obligations from the property.
You might want to find a different bankruptcy attorney and work through this to plan for a possible dismissal of his current bankruptcy.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.