Bankruptcy & sub2

Hi all,

I am in Austin, TX. Seller emailed yesterday and said she is behind on April payment. Willing to do sub2. I guess I want to educate myself about something she said:

They bought house in 2001. Two years later, husband lost job and they filed Chapter 13. Seems like that “solved” some problems; but a year later husband lost job again and they filed for bankruptcy again. Now she says, she was behind on Feb and March payments, bank started foreclosure proceedings; they managed to get some money and mailed it; “but the bank still started foreclosure proceedings because of the bankruptcy” - this is what she said.

I guess I am trying to understand the legal process of bankruptcy in Texas and how that forces a lender to start foreclosure even if the sellers are current (with past late payments).



Good Morning SRB,

In Texas, NOT MY STATE, but from what I have read, Texas is one of the only states that when you file BK and you OWN RE, The BK can not go after it. This might be old news and the laws might have changed. But thats what I have read a few years ago.

Also, the seller filed BK in 2003 and than again in 2004? From my understanding again, I believe one can only BK in 7 years, not every year. Now Texas might be differant. But iI believe if you file bk today, you can not file again until 2012.

Try looking up your laws in your state to get a better understanding of it!!!

Good Luck!!


I just talked to my RE lawyer and he said that the bank cannot foreclose if the payments are current even if the borrower is in bankruptcy. I don’t know what the seller was trying when she said that they mailed the payments and the bank still started foreclosure proceedings.


A little advice when you start believing what sellers tell in when they are in bad situations, then stand by for the RAM, because this is where you are headed.

Always do your “due diligence” when dealing with any seller, never go by what they say, I don’t mean to sound like you should not trust sellers, but don’t.

You will hear 10,000 stories and the one you heard is just one of them.

John $Cash$ Locke