Bankruptcy Situation - Could this be a deal?

Question

Hello again BP family. Saw a vacant house in my farm area. Searched RealQuest to determine owner of record. Further investigation reveals the owner and his wife had a joint Ch 7  bankruptcy that was discharged 11/08. The owners still have a legal right to sell the house...correct? I have the the name of what appears to be their attorney and the trustee attorney. Who can I contact about buying this vacant house?  Trustee attorney?  Owners? Let me know your thoughts...

Dave Toelkes · Answer

If the bankruptcy has been discharged, the court and the bankruptcy attorney are no longer in the picture.

Contact the owners.

Dave Toelkes · Answer

I am not expert in bankruptcy, but it is a common misconception that Ch 7 means total liquidation.

Many states have homestead laws that exempt a certain portion of a homeowner's equity from forced liquidation in a bankruptcy.  A car may also be excluded as well as tools of a trade needed to earn a living.

If you really need to know the facts in this specific case, check the bankruptcy filing.  It should be a matter of public record.

Michael G. · Answer

Interesting point Steve but the tax receiver still has the property in the owners names. I'm going to the court house and check the last deed recorded on Friday. I sent an e-mail to the attorney who handled the Chapter 7 proceeding for them asking if he could notify them that I would like to buy. Lets see where that goes.

Steve Babiak · Answer

Something seems a bit strange here to me.  In CH7, that is liquidation of assets and usually because they owe more than they are worth in assets, and it's not a stretched out repayment plan (like CH13).  Since it is discharged, that means that the CH7 was completed by the debtors successfully.  Just wondering if the house had to be sold in the CH7 to pay off the debts ...

Michael G. · Answer

Thanks Dave.

Bankruptcy Situation - Could this be a deal?

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