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Want to buy house in foreclosure whose owner declared bankruptcy. Any landmines or recommendations to know about?
Anonymous2 views4 answers
The sale was postponed today. Am I right that the bankruptcy trustee would now be the person to speak with in order to discuss an offer on the house? The house is not under water, but considering the likely renovation costs there would also need to be some flexibility over the purchase price. Thank you for any advice!
yes, there are land mines. An hour of time with a bankruptcy atttorney would be a good investment.The Trustee is the one with authority to sell- unless there is no equity and the Trustee abandons the property.
A bankruptcy trustee is only going to have the authority to sell if the debtor did not protect the property with exemptions on Schedule C of the petition. A bankruptcy trustee will only go to the bother of selling if s/he can make a quick profit doing so. Otherwise, when the stay is lifted, the foreclosure will resume in about 60 days after the meeting of creditors. Too many landmines to enumerate here - there are easier flips to find, which is why folks generally don't look to buy real estate in the bankruptcy system unless they have inside contacts. Hope this perspective helps!
You cannot possible imagine all the minefields that exist. I concur with the recommendations of my distinguished colleagues. To properly answer your questions and address your concerns, the best way to handle this is with an in person consultation with an experienced Bankruptcy attorney. Use 's Find a Lawyer tool to select a qualified attorney. Good luck.
The trustee is a good place to start. However if the trustee cannot return money to the bankrupt estate with which to pay creditors, the trustee may abandon the property. In that instance the owner would be making decisions. The owner will always have a stake in the matter so at some point he/she needs to be in the loop. You'll certainly want to retain counsel to draft and negotiate any offer and to do a title search. Good luck!
