Quit Claims

If a property is Quit Claimed while in bankruptcy can you still proceed with the transaction, and if not what is the best coarse of action?

Comments(7)

  • ypochris30th November, 2007

    A quit claim grants any "right, title, or interest" that the seller may have to transfer. A person in bankruptcy is unlikely to have any right to transfer title, in which case the quit claim deed transfers nothing.

    I suggest dealing through the bankrupy trustee. However, if the property survives the bankruptcy still in the hands of the seller, your quit claim deed may be a valid transfer.

    Chris

  • bargain7630th November, 2007

    Good reply, Chris. I agree.

    The Bankruptcy Trustee needs to release the property before ownership can be transferred.
    [addsig]

  • ypochris2nd December, 2007

    An LLC is an additional layer of protection, but particularly a single member LLC can be pierced and you could be found personally liable.

    Chris

  • cjmazur2nd December, 2007

    It may work, but is it worth the risk?

    Say you have a $5M apartment building in the LLC. A tenant falls off the 2nd story balcony, and dies.

    Her estate wins a 2M judgement against the LLC.

    Was loosing 2M in equity (+legal fees) "worth" paying say 5000/yr for the policy?

    FYI: Kemper/Unitrin will allow you to add a single member LLC to a personal umbrella policy as an additional insured, which I thought was pretty cool.

  • schnibitz2nd December, 2007

    Thank you all very much for the great advice!

  • cjmazur2nd December, 2007

    My atty said to avoid it as well. His primary concern in my situation was the DOS clause in the primary note.

  • EJOG2nd December, 2007

    Thanks for the reply!

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