Pre-foreclosure and ch. 7 BK - options? - Posted by vk60546

Real Estate Investing
1

Posted by John Corey on May 31, 2006 at 13:34:41:

If the BK is open then the trustee controls the property if there is to be a sale. Any sale would need to be approved by the court (through the trustee) and the proceeds from the sale would go to the creditors. The trustee could choose to release the property from the BK if there is little real equity.

If the BK was already discharged or otherwise closed then you can deal with the property owner as if the BK is not there as it is not active. It impacts the owners ability to get a new loan but not the owners ability to buy or sell assets.

John Corey

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Pre-foreclosure and ch. 7 BK - options? - Posted by vk60546

Posted by vk60546 on May 31, 2006 at 11:44:27:

A seller has about 50K in equity but also has ch. 7 BK.

What are the questions I need to be asking? How can I help them? I’m in IL.

Thanks,
VK

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Re: Pre-foreclosure and ch. 7 BK - options? - Posted by Joe Kaiser

Posted by Joe Kaiser on June 01, 2006 at 08:54:00:

$50k equity is not a helpful number.

$50k equity with a $100k house is totally different than $50k equity on
a $500k house. One is equity that can be converted to cash, for the
most part, and one is equity that’s totally meaningless and probably
not worth anything.

Where does yours fit in?

Joe

4

Re: Pre-foreclosure and ch. 7 BK - options? - Posted by John Corey

Posted by John Corey on May 31, 2006 at 11:49:05:

Are you saying they had a prior BK that was discharged and the BK is therefore an item on their credit file?

Or are you saying they are in Ch. 7 BK right now so their hands are tied when it comes to the property.

John Corey

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Re: Pre-foreclosure and ch. 7 BK - options? - Posted by vk60546

Posted by vk60546 on June 01, 2006 at 09:45:25:

The house is worth approx. 250K, while the bal, is 188K

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Re: Pre-foreclosure and ch. 7 BK - options? - Posted by vk60546

Posted by vk60546 on May 31, 2006 at 13:14:40:

John,
Thanks for your response. I’m not sure if the BK was discharged, but it was filed in June of 2005 (is it safe to presume it was discharged).

Hopefully, I’m not asking for a book, but what are my actions if the BK was discharged, vs. being filed at the moment?

Thanks,
VK