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If you sell on a land contract can the buyer file bankruptcy to prevent paying the monthly payments. Michigan resident.
Anonymous2 views1 answers
I plan on selling an investment home. The person interested has already filed chapter 11 and chapter 7 in the past. Can he file bankruptcy again in the near future. How does filing banruptcy affect his mortgage payment.
I am trying to determine whether or not he can stay in the house for any length of time if he does file bankruptcy again. I am trying to determine if I should take a chance on selling on land contract to this person, what kind of problems would I have if he did file bankruptcy. Is he protected from foreclosure,
First, you are intermixing terms. If you sell on a land contract there is no mortgage, and no mortgage payment. Also, while you can foreclose on a land contract, the easier route is to file a forfeiture action.
In answer to your general question, you need to do a credit check on the purchaser and look at his recent tax returns to determine how much debt he has compared to his income. You also should get a down payment of at least 10% to assure that you are covered for the time it takes (about six months) to remove him through a forfeiture action if he does not pay.
If he files a bankruptcy, you have rights as a creditor to be paid as agreed, or to have the property released back to you.
You should probably talk to an attorney for specific legal advice on this situation.
