Expert: Terry Leeders - 4/3/2009

Question
Due to my job loss in January, my husband and I are going to file bankruptcy (Chp. 7) and are not keeping our home in Phoenix. We have no equity since we've only lived here 1.5 years.  He was recently offered an opportunity in Alabama with his company that would be more pay for a better quality of life/lower cost of living.  We cannot file for 6 months (Oct. 2009) once we move.  Our biggest concern/question is this:
-His mother owns a cabin in Michigan on American Legion property, but you must be a vet to have your name on the cabin.  My husband's name is on the cabin, since he is the veteran of the family, but she has paid for everything for the cabin (we've actually only been there twice since we live so far away).  What happens to the cabin if we file?  I am not sure if she paid full cash or still owes on it.

Thank you!

Answer
SInce his name is on it, this is an asset that can be liquidated in a chapter 7.  Any transfer would need to be disclosed, and would be undone by the trustee, so that won't work. The only chapter available then would be chapter 13, whereby you would pay back a % of the debts to protect that asset.