bankruptcy=owners. How to acquire property? - Posted by JOHNMAN


#1

Posted by johnman on January 19, 1999 at 20:55:25:

Redline,

Thanks for the input. I didn’t know this.

Johnman


#2

bankruptcy=owners. How to acquire property? - Posted by JOHNMAN

Posted by JOHNMAN on January 18, 1999 at 23:11:23:

Hi folks,

Here’s the situation:

I was contacted two weeks ago by a couple that had to file bankruptcy. Medical reasons! They told me that all they want is about $1500 to get out of the property. The loan balance is about $58,000. Houses in the area are selling between $80-90K. I contacted the bank but they told me that I will need to contact the bankruptcy lawyer of the mortgage co… I did and they told me that as long as the property is in bankruptcy court, it can’t be sold. The sellers have a lawyer but he hasn’t returned my phone call.

I’m confused with this whole thing. What happens when someone files bankruptcy? What happens to the property?

How can I acquire this property?

Any suggestions?

Thanks,
Johnman


#3

Re: bankruptcy=owners. How to acquire property? - Posted by Irwin

Posted by Irwin on January 19, 1999 at 22:39:02:

I’m assuming they filed a Chapter 7 (discharges debts) and not a Ch. 13 (pays off debts.) In Ch 7 cases, an interim trustee is appointed to determine whether there are sufficient assets to sell and apply to the debts. If the trustee doesn’t feel that there’s sufficient equity in the house to make it worthwhile, he’ll release the property back to the debtors,and they can do with it as they please. The release process in some jurisdictions is very simple and in others, very complicated and you’ll need a lawyer to get it done.
If these people have $30-40k in equity, I would think the trustee will try to market the property himself, so you might possibly buy it from him, but you won’t get it for just the balance on the mortgage.
The most important thing to know now, is what the trustee intends to do with the house.


#4

Re: bankruptcy=owners. How to acquire property? - Posted by Redline

Posted by Redline on January 19, 1999 at 11:17:00:

Johnman, from what I understand - once the bankruptcy is filed an administrator is assigned and all assets are frozen. Depending on if it’s Chapter 11 or Chapter 13, assets will be sold off by the court to pay debt or the total debt will be ‘reorganized’ to allow the homeowner to catch up and become current.

I’m not aware of any way to purchase the house during this period - perhaps someone else here has done it.

Hope this helps,
RL


#5

Re: bankruptcy=owners. How to acquire property? - Posted by Rob FL

Posted by Rob FL on January 20, 1999 at 20:02:31:

In some states, homestead is exempt from bankruptcy up to a certain amount of equity like 100K. In FL homestead is 100% exempt up to 1/2 acre in a city or 160 acres outside a city.


#6

Re: bankruptcy=owners. How to acquire property? - Posted by johnman

Posted by johnman on January 19, 1999 at 23:13:27:

Thanks Irwin. It’s nice to hear from you again. I just keep running into these crazy scenarios. This just brings me one more step closer to my first deal.

See yah,
Johnman