Posted by Ben (IN) on March 31, 2000 at 08:46:21:
I bought a house Subject-To about a year ago and resold it on a L/O, the tenants are paying on time, everything is fine there. What’s happening though is one of the previous owners (it was a couple who got divorced just after I bought the house) is filing Chapter 7 BK to blow off all his consumer debt. This in itself doesn’t seem to be so bad but he’s including the loan on this house in the BK filing “just to be on the safe side”. I told him not to do it because there was no need, the payments are current and always will be until the loan is paid in full. He’s not listening though and is going ahead with his Chapter 7 anyway (the divorce was, and still is, pretty ugly).
Has this happened to anyone here? What are the negatives I should be looking for? Are there any pre-emptive measures I can take to protect my interests (title is already in a Land Trust) and those of my tenant-buyer?
BTW, payments are current, always have been, and property is insured with dwelling policy in excess of the loan balance.
Any feedback would be a great help.