Its been awhile since I’ve been here, been laying low on Re but I have a little issue that I could use some input on?
I had to sell ahouse during the slow times with a AITD, unfortunatley the loan is in my name but title is in buyers. I got a good down but still sucks to be in this situation.
He calls me the other day and says that he is going to let the house go into foreclosue and is filing bankruptcy after trying to refi and the house is worth less than he owes(and I owe).
My contract states that in the event of default it reverts to a tenant/landlord situation and I can evict instead of foreclose.
The lawyer I talked to said that doesnt matter and I have to go through the foreclosure process anyways.
Continueing to make my underlying mortgage and the 4 months or so it will take for foreclosure not to mention the cost of lifitng the stay and recording title after is not going to be cheap.
My lawyer also says I cant offer to pay him off for the deed becuase he is in bankruptcy.
Is there a way to get him in front of a judge and see what he thinks?
Offer him deed in leu of foreclosure and let him stay a couple months??
I suspect your attorney is correct on all counts. There is a chance the bankruptcy will be dismissed and you can then immediately proceed with your foreclosure and seek a deficiency judgment against the debtor.
If the debtor is filing bankruptcy you are not allowed to attempt any debt collection or initiate a foreclosure action. If the bankruptcy is a Chapter 13, you will get paid under a court mandated payment plan. If the bankruptcy is Chapter 7, then the court will supervise liquidation of all assets and pay off secured creditors before unsecured creditors. If there is not enough money from the liquidation to pay of all the secured creditors in full, then the amount you receive will be prorated. For example, if the secured debts total $100K but the liquidation sale only brought in $50K, then the secured creditors will only be paid 50 cents on the dollar.
If the debtor files for bankruptcy, make sure you file a creditor’s claim with the bankruptcy court. Let your attorney guide you.
Turns out he filed for Ch 7 which was discharged in 04. I checked for current filing but nothing came up yet so I called him to see if we could work somehting out beforehand, he accused me of harrasment:) Looks like its the hard way. Im sure he will try for Ch 7 again and stay in the home as long as possible. Seems like Im dealing with a chronic BR filer.
You can check the Federal BK Statutes, but I believe he cannot file another BK until seven years have passed from the last time he filed. So, if he was discharged in 2004, he is not eligible to file until 2011.
You are going to need to file the foreclosure papers or offer him money to move out and transfer the deed back to you.
He sounds like he is stringing you along with the BK talk, I am sure he knows the BK law and is hoping you do not.
ya, I checked the BR status and he is still not filed one month after he has not paid. My lawyer told my the same as you. He filed chapter 7 before so he could only file ch 13 now but that would mean he would have to keep up his payments and I dont think that is his plan.
Tommorrow is 30 days late so I will send notice of default and get things going. I called him to talk about a payoff and he threatened me with harrasment so he is not into any cooperation.
What if he waits a month or 2 in default then files for BR to try to string it out further?? Would still be CH13 and he would have to get current, right??
From what I have read he can file a CH 13 four years after a CH7, so it looks like he is eligible depending on the date of discharge of his CH7. 2004-2008
“You may file Chapter 13 and obtain a discharge, so long as you did not receive an earlier discharge in a 7, 11 or 12 in the last 4 years, or another chapter 13 in the last 2 years, but that is an issue to discuss with your attorney. (§1328(f)”
You really need to go ahead and file the default, because this is when the clock starts. You as a secured creditor under the CH13 can lift the automatic stay and repossess or foreclose on the property if he fails to pay his house payment. Of course like anything else a motion to the court will have to be filed and approved by the court, as far as I have read this should not present a problem.
that is a tough stop to be in. I know a couple guys that bought several properties with a thrid partner, the third partner has now filed bankruptcy and they are unable to pay off the mortgage or refinance.