I’ve been asking around the net but have yet to still find the answer. Here’s the situation the homeowner got behind on payments and at the same time had to pay around 20,000 in medical bills. Well needless to say that it was too much coming out of the sellers pockets and he had to file chapter 13. Now his attorney told him to just stop paying on the house because it was in bankruptcy, but sometime later he was on the phone with the state housing association and they told him if he could pay on the house then to go ahead and do so because that would bring him out of default. But by this time he was too far behind on payments and was a bit upset from the advice given to him by his BK attorney.
So my question is how can I purchase the house? Can the house just be removed from the bankruptcy? I know that if it can be removed then the payments need to be made up very quickly so the bank doesn’t take back the property. And if the house can be removed then will the medical bills be attached to the house? Or can the house not be removed from the BK and the only way to get it out is to purchase it through the BK? “You can tell I’m quite lost on this situation and don’t know which direction to go.”
My next question would be; if the house can be removed from the BK then I would assume that I would need to already have all the information from the bank I would need to quickly bring the mtg current. And what depertment do I speak with to have the back payments put on a plan to be paid over time or just added to the term of the loan? Would it just be the loss mitigation office?
Well theres a few things you need to do. How long ago did the home owner file BK? If it hasn’t been filed in the courts yet, yes there is ways around it. You need to do a title search on his home to see if its been attacked yet.
I don’t believe if the BK has been filed to the courts, that it can be pulled off…
But thats what I would do at this point. Investigate the title etc. If everything does go threw, The mortgage company will automatically send you to their collection department that will work out a payment plan for ya if they go along with it!!
Good Luck with that!!!
What do I look for on the title that tells me if it has been attacked yet? I’m not sure how long ago he filed BK but I’ll find that out today and if it has been to the courts yet.
legal owners of property, any liens, judgements, back taxes against property. Etc. These will be the keys!!!
go ahead and by it the owner is the owner and he or she has the right
to sell. if the bank court does not like it,dismiss the case.and then BUYl.
If you want to by BUY.
If you want to sell SELL.
real estate is a non exact game.
There is some misinformation in the posts above. Once the BK case is filed several things can happen all of which will have to be approved by the court. The case can be dismissed for lack of filing a plan or failure to make plan payments or several other reasons. Once the case is dismissed you can buy the house. The case can be discharged when the seller has paid off the plan over the 3 to 5 years and then you can buy the house and the back payments will have been brought current thru the plan. You can get an attorney ( or do it yourself but very difficult without help from the trustee) to file a motion to sell the house to you. The motion will be filed with the court and if there are no objections from the trustee or lenders the court will usually automatically approved the sale and the others debts will remain in the plan for the seller to deal with. If you can work out a plan with the trustee and the bank and the seller at the same time you can file an agreed order with the motion to sell. This will speed up the process and you may not have to have a hearing on the matter. It can get complicated and I would suggest a good BK attorney unless you can get the trustee to file the orders and motions. Keep in mind that the trustee is very busy. Someone from their office may be able to help however, they get paid on what money they collect thru the plan and not on how many houses they sell.
for gods sake!!
do not get an attorney all they do is take your money and run…
as tejr says you can dismiss a chapter 13 for a lot of reasons. one of them is DO NOT SHOW UP AT COURT.
point i was trying to make was dont get the lawyers and everyone else involved in a simple buy/sell.
I handle these all the time. Yes, you can make money with these deals. Have you asked all the right questions? Yes you also need a prem. title search. I currently am working on one where the owner stopped making payments in Feb 2004—They decided to do something about it 2 weeks ago. SHERIFF SALE April 5th. We will get the deal done, and make some money doing it. If this is your first deal, work with someone how knows what to do—before you waste too much time.
Well I am a Mortgage Broker. I deal mostly with investors or people in a BK or foreclosure. So he is the answer to what you need as far as the laws in my area are and from someone with a lot of experience with this.
if someone is in a 13, you don’t have to deal with anything regarding it. Its not your problem. All that will happen is the closing will take a bit longer. He will have to contact the BK lawyer he used. They will set up a date which usually takes about 20 days to get in court. The lawyer will inform the judge his client is wishing to sell his home. Than the judge will review the BK and all arrears will have to be paid off at the closing of the sale. This has nothing to do with the buyer.
As far as him not paying his housing payments. He should consider a different lawyer. When someone enters a 13. They are restructuring personal debt and spreading it out over up to a 5 year period. This does not include your normal month payment. Your trustee payment is only paying back what you had past due. You still need to make your present payments. If you do not make them or trustee payments and fall behind 120 days again you are put out of the BK and back into foreclosure.
hope that helped a little