Subject To : Seller filed a bankruptcy

[Account Closed]

Hello,

I bought a property last year subject to existing financing.
Later I sold this property on owner financing to another buyer.

I was making regular payments to the existing loan since i sold the property.
Last month I was unable to make the payment to the lender and on further inquiry I found out that the original seller filed a bankruptcy under Chapter 7.

What should be the ideal thing to do now ?
Am i still liable for the existing loan ? How can i continue to pay the loan balance ?

Thanks
Abhijeet 

[Account Closed]

Originally posted by @Account Closed:

Hello,

I bought a property last year subject to existing financing.
Later I sold this property on owner financing to another buyer.

I was making regular payments to the existing loan since i sold the property.
Last month I was unable to make the payment to the lender and on further inquiry I found out that the original seller filed a bankruptcy under Chapter 7.

What should be the ideal thing to do now ?
Am i still liable for the existing loan ? How can i continue to pay the loan balance ?

Thanks
Abhijeet 

You need a bankruptcy attorney to represent your interests in bankruptcy court. Depending on how title is currently vested, the case could go a number of ways. The person you sold the property to is also at risk. You could possibly be a "lawsuit waiting to happen" with the person you sold the property to. The bankruptcy attorney you hire should be one with real estate "creative financing" experience or you will be paying him for "on the job training" to learn how to defend your interests. Even after you get all of this straightened out, the possibility exists of the bank calling the loan due. There are several techniques to employ, but since I am not an attorney I am not allowed and would not in a public forum discuss those techniques. The right attorney with a real estate, lending and bankruptcy background can help you. But you must act quickly, there are timelines associated with bankruptcies.