Tough Bankruptcy/short Sale Combo-Need Input

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We've come across a deal unlike many of our others. The homeowner is currently in Chap 13 but has fallen behind on his payments. We were contacted to step in to see if we could assist. The home has been listed for some time with no interest. The 1st is now at 209,000 and the 2nd is at 95,000 on a home that is worth 250,000. The homeowner had an appraisal done (obviously a favor from a local friend) and received a value of $184,500. The homeowner's attorney then filed for a motion to avoid the lien of the 2nd upon completion of their Chap 13 and the discharge of their case. We got with the homeowners and immediately contacted the 1st for info. Their bankruptcy dept was ready to file for a relief from stay but the bankruptcy trustee informed them that she was going to file for a dismissal.(due to late payments)..which she did on Jan 8th. The homeowners have now informed us that they are going to file Chap 7. The homeowners just want out from under the house and are packing up. Is it likely that the 2nd will be "lien stripped?" Is using the possible Chap 7 filing a good motivation to get the 1st to move and move quickly? Seems to me,that we either have to wait for the order dismissing the Chap 13 or get the trustee's approval to short sale before they convert to Chap 7. Any and all help would be greatly appreciated.

Comments(1)

  • LynLinz26th January, 2004

    Don't know the answers am learning also, but I have a similar deal and the owner tells me that he had filed Chp 13 and it got canceled, he then had to wait for 6 m before he could fiile Ch7 which he plans to do any day

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