Buying a house in bankruptcy
Hey guys! This is a first for me and a little complicated. I wrote up a terms contract with a seller and brought the contract to my closing attorney. They did a title check and saw that there was a final judgment last November. Upon asking the seller, he said his wife passed and while she was sick, he had to protect the house so he filed for chapter 13 bankruptcy and he put the house and cars in the bankruptcy.
He gave me a call last week saying that he missed a bankruptcy payment and needed to pay before his hearing the next day or all will be lost. So going against what I think most investors would do, I went to bankruptcy court to verify it myself and ultimately gave the attorney a check of $2028.97 to reinstate the bankruptcy. I rewrote our contract and put $2038.97 as the earnest money deposit.
Now, I am super confused as to what I can or cannot do and what my next step should be. Will terms work? Do I need to renegotiate to cash? What is the process dealing with a property in bankruptcy? Anyone dealt with something like this? What would you do?