September 10th, 2012 by Questions
Me and my husband have our home and on paper we own his parents house as a rental property, although they pay the mortgage and the taxes, we put no money towards the house it is theirs but on paper it is ours. If we were to go bankrupt would they lose their house? Or is there some way to keep it. Like I said we make absolutely no money on it. Thank you
Posted from: Ontario
One Response to “Rental Property”
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September 10, 2012 at 8:39 pm, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
This will definately be an issue as legally your name is on title, therefore legally it is your property. As a result if you filed for bankruptcy it is an asset that would have to be considered. There may be some argument that the house may comprise some sort of trust property. Whether this is a constructive trust or some other type will depend on details I am not privy to. What I recommend is you contact a local trustee, explain all the details and they will guide you from there. For reference, right now one of the worst things you could do is simply transfer the property into their names without seeking proper advice first. Simply effecting a transfer of that nature may make things more difficult on you in the long run.