When trying to do a short sale while your clients in bankruptcy, can you still do a short? Would the trustee allow the property to get dismissed if they found out you getting the property for a discount?
thanks…
Howdy Focusonmoney:
The Trustee has no sayso in the matter. The dude with the black robe grants the orders. If there are no objections to a motion and it is legal the judge will usually grant the motion and make it an order of the court. The no objections part is where the problem may arrise. The trustee may object if he sees equity for the estate or the bank may object or any other creditor may object too. These are usually handled pretty fast by the judge and in fact most get worked out in an agreed order between all parties without being tried.
Short sales can occur in BK but all parties must agree and this can be a stumbling block.
One note here that is amusing. I have seen all parties show up for the hearing on a case like this and ask the judge for an hour or more to hear the case and the other side says they will need even longer. The judge said you will have 10 minutes and you will be last on the docket. Before their turn it was settled in the hall.
“Short sales can occur in BK but all parties must agree and this can be a stumbling block.”
When you said all parties must agree do you mean you and the seller agreeing or all the creditors and the judge agreeing?
Howdy focusonmoney:
The movant will send out a notice to all creditors and the court and the trustee giving the merits of the motion to sell the property below the note balance. If there are no objections usually the order is granted without a hearing. If any one objects, the trustee, lender, listed creditor, a hearing will be held giving all concerned a chance to be heard. Then the judge will approve or deny the motion but usually based on the law or previous case history and therefor you will need the the approval of al parties to pull off the short sale especially if creditors see the only chance they have of getting paid being sold at below market value.
Hope this explains a little better.
thanks alot ;)…