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AngelMG

Seller in L/O filed bankruptcy

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We have been in a lease with an option to buy for over two years. The seller filed bankruptcy about 9 months ago. We have continued to make our payments directly to the lenders bankruptcy dept. We would like to able to sell the home now and are wondering how this bankruptcy will effect closing.

 

Thank you,

 

AngelMG

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Hi, Angel. Hard to say exactly how this affects your deal. First, BK laws vary from state to state. Then there is the question of the type of BK, (7 or 11, for example), and what is included in the BK. If the mortgage on this property is current the BK filing may not have any affect at all.

As always, in this situation the best advice anyone can give you is to contact a local attorney who can answer your questions.

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Hi, Angel. Hard to say exactly how this affects your deal. First, BK laws vary from state to state. Then there is the question of the type of BK, (7 or 11, for example), and what is included in the BK. If the mortgage on this property is current the BK filing may not have any affect at all.

As always, in this situation the best advice anyone can give you is to contact a local attorney who can answer your questions.

 

Well that is a stinker Angel. I have seen this before, and it can be a nightmare. As MC stated, if the payments are current, then it may not be a problem. It sound like you all have made teh payments, so you might be OK. I have seen a homeowner file 13, (reorginization). In order to SELL the house now, they have to pull it out of the 13. When they did this, the house is now a target for foreclosure. The race is on to see what will happen first. THe purchase or the foreclosure. In one case I saw, the penalites etc., caused the payoff to be greater than appraised value, and the mtg. company would not do a short sale, even though we had a purchaser ready. They foreclosed and the purchaser got another house. We had the homeowenr pay the purchaser several thousand dollars for the trouble.

In our contracts it states that the house MAY NOT be placed into BK, and that it is not involved in any probate as well.

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