It’d be better to leave the house out of the bankruptcy…
Otherwise, You’ll have to get the sell ok’d buy the bankruptcy trustee… that may or may not fly unless they understand the reason they are giving up that equity.
I might consider taking the risk, but would approach it differently…
Simply call the mortgage company and offer to send an extra month… at most and extra above and beyond the payments to catch up the rest of the arreage…
Risk as little cash as possible (always the name of the game anway).
I would get something singed from your seller realeasing liabilty in the event the bankruptcy court demanded a cash sell…
In the meantime… I would lease the house out, possibly even section 8 (for higher cashflow) until all problems are solved.
Subject to and Chapter 7 Bankruptcy-Help!! - Posted by Mindy in Texas
Posted by Mindy in Texas on February 14, 2002 at 12:03:32:
What an exciting business! My second subject to deal is as follows:
Gentleman is three payments behind on his mortgage. Just received his first foreclosure notice in mail. Monthly payments are $1080/mo. (PITI)
Wants to walk away with nothing to him, just take over “subject to” the existing mortgage balance which is currently $98,465. I know house will sell today at $125,000. If this works out, we intend to lease option it with an even higher price when we sell. There is some money to made here and I want to do everything right.
Divorced 2 years ago, ex-wife is still on mortgage, he got the house.
Here’s where I need help. He is currently filing Chapter 7 bankruptcy with a “motion to sell” in order to sell his home. This is in Texas and from what I understand, Ch. 7 wipes out all debts, and you can keep your house. We have not completed any paperwork yet and his attorney is not aware of anything we are trying to do.
Question: Can I take a house subject to while he is going through his bankruptcy? I know he does not want to wait until it is finalized because he is already behind on payments and does not want to jeopordize his ex-wife’s credit since she primarily takes care of their children.
Please comment on this situation. I’d appreciate it. Mindy,Texas
Re: Subject to and Chapter 7 Bankruptcy-Help!! - Posted by JohnBoy
Posted by JohnBoy on February 15, 2002 at 03:33:55:
If hasn’t filed yet and he is concerned about his wife’s credit then this should give you good leverage to get him to go along with excluding this from his BK.
If he files BK against the lender his wife will still be liable for the debt since she is on the mortgage also. That doesn’t discharge her liability, only his.
If she signed her interest over to him through the divorce then she doesn’t even have ownership in the property. But she will always remain liable to the lender since she signed on the loan. Her only way out is to either pay the lender off, or get the lender to release her from the loan which is highly unlikely!
That means she would end up having to pay the lender off or file a BK herself so she can get discharged from owing the lender on the loan!
So if he files against the house he’s going to screw up his wife’s credit anyway unless she makes the payments on the loan!
If he’s already filed then you will need court approval before he can sell it. Otherwise he could motion to have his BK dismissed altogether, then deal with the house and go back and refile again later!
There is no currently filing. Either he has or he hasn’t. In Texas a chapter seven wipes out unsecured debt. It does not wipe out a secured debt on anything including your home. If you affirm a debt it can be paid off and not liquidated.
As David said, get the scoop quick. If not yet filed exclude it. Deed it over to a land trust and get payments made up.