I have a seller who told me that she is going to let her house go into foreclosure.
She also told me that she is going to file bankruptcy on 3/14/05 no matter what. Chapter 7.
She will sell to me for what she owes, I think it has about 70,000 worth of equity.
My question is if she files on Monday, in which she will, can I release the house from the bankrutpcy.
Or can she exclude the house from the bankrutpcy?
What should I do to not lose this deal?
A bankruptcy court has the power to negate a sale for up to a year if the sale was meant to defraud other creditors. If the title change before the filing and there is not much other debt then there is no real problem. The lender will turn it over to their bankruptcy group but keep making the payments. Sell it again right away to another partner as judges don’t like to harm others not involved directly.
Hi People:
Just a thought! How can she declair something she does not own???. If she sales the house before she files bankruptcy ,she can only claim the 70k as her assets.
If you have the sales contract and the mortgage co. is working up the papers with you,where would her interest be? She won`t get the money untill all the papers are signed!
I’ve heard from a bankruptcy attorney that part of the very long bankruptcy questionaire asks if the person filing has had any real estate transactions in the past months–don’t remember the exact timeframe. The trustee does have the power to unwind the sale as Bud posted. How often that actually happens, I don’t know.
Just had a similar deal in WI. Person wanted to see house, but then filed BK7. Have been working with the BK trustee attorneys to finish the deal (3 months). Will close next month. Would have been easier befor BK filing.
It would be easier to do before BK. Let me know if seller is willing to wait on filing. Maybe you can talk some sense into her—once in BK the Court gets the money. If I can be of help email me.
How bad are the liens on title?? Maybe, she doesn’t care because liens/judgments wipe out her $70K equity (that is what happened in our case).
Then it may make more sense dealing with trustee (Court can get alot of things wiped off title–in our deal it was over $35K of extra liens).