BK’s and land trusts - Posted by rayrick
Posted by rayrick on May 20, 1999 at 17:49:23:
My first deal has taken a rather distressing turn today. The sellers called to inform me that they received some sort of large bill (in the thousands) that they had forgotten about-overlooked-god-knows-what and may be forced to declare bankruptcy. I have a signed agreement with them, but we have not yet closed. My intent was to buy their house “subject to” by placing it in a land trust.
My first thought was to see if there is some way to address these people’s financial troubles in the deal somehow. Thus far the woman has been reluctant to give me any details, but she may tomorrow after discussing it with her husband. If an extra $1000 or two would solve their problem, the deal may still be worth it.
What exactly would happen if these people put their property in a trust, assigned beneficial interest to me and then declared bankruptcy, in, say a month? Seems to me that at the very least the bank would find out about the deal, thereby rendering the whole land trust business kind of useless. I would have the deed though, so maybe what happens to them after that is irrelevant. I need to give Bronchick’s course a good study.
The possibility exists that this is all some sort of a ruse on their part to get out of the deal, but I kind of doubt it. they seemed too desperate to sell for that.
Any thoughts or advice would be most welcome. thanks all.