Posted by B.L.Renfrow on May 11, 2000 at 21:57:43:
This isn’t really my area of expertise, but I can fill in a few of the blanks for you.
First, unless the seller moves for dismissal of the bankruptcy petition, he cannot legally dispose of ANY asset without court approval. And I would be willing to bet the judge would not look too favorably on a plan to put $10k cash in the seller’s hands, unless that cash was to go toward repayment of his debts.
Second, is the property in foreclosure, or is the loan current? I assume, when you refer to “fees” the loan is delinquent. If it’s in foreclosure, and the BK is dismissed, the lender will immediately move forward with the foreclosure.
If the seller sells the property, and pockets $10k in the process, then immediately files for Chapter 7, I would suspect the judge might reverse the sale faster than you can say “bankruptcy fraud.”
Finally, back taxes cannot be bankrupted away unless they are more than 3 years old. If the IRS has filed a lien against the property, as far as I know, they aren’t too likely to remove it unless they are paid. However, I have not done one of these, so hopefully someone with relevant experience will contribute.