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In lieu of SS

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  • In lieu of SS

    My girlfriend is going through a divorce and her ex agreed to sign over the house to her in lieu of paying spousal support (the house is currently in both of their names). He has been ordered by the courts to sign over the house which he has not yet done.

    If he declares bankruptcy BEFORE signing over the house (there was no deadline for him to sign it over), can the house be re-possessed to pay off his debts or will he still have to sign it over because he was ordered by the courts to do so?

    Her worry is that she will lose the house if he declares bankruptcy.


  • #2
    This is a question that a bankruptcy trustee could answer. They usually will provide a free half hour consultation to those considering bankruptcy.

    I don't know the answer for sure, but if the spouse decides to do this, it would certainly seem reasonable that the creditors will be able to make a claim against his interest in the home as of the date of his assignment in bankruptcy.

    On the other hand, if he signed his interest it the home over to the spouse priort to declaring bankruptcy, the creditors might have a claim that he recklessly disposed of his asset just to avoid them.

    I would be worried too if I were her.


    • #3
      Something else to ponder with a lawyer and the bank as she is still on the title would the bank not have to seek payment from her before they would fore-close? as well if he were to declare bankruptcy.

      A bank could get themselves into alot of hot water if they did otherwise I believe. I face the same situation, but have not lived in the house for 5 years. He wants it he can have it. Also he tried to force me to resign on the mortgage. Under the conditions of it they only required one to do so. so in honouring that clause they left it alone. He has all tied up in an appeal that will be heard in a few month so there is nothing that anyone can do.
      I am still listed on the mortgage and title.

      Check with the mortgage holder.
      Last edited by AtALoss; 01-19-2009, 07:24 PM. Reason: omitted info


      • #4

        There are two different laws here to deal with,

        One being the family /divorce law which if he was order to something on a specific date that order is essentially in force from that date. If he has not signed release as order he could be in contempt. That is another issue aside from the bankruptcy.

        The other law being under the bankruptcy and Insolvency Act.

        The best thing you can do is speak with a trustee in bankruptcy, they should be able to direct you.


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