Land Trust In Bankruptcy
The property in question was deeded to a land trust, and I am the trustee. I recorded the deed to trustee. The problem is that, at the time, I didn’t realize that the owner had filed for bankruptcy chapter 13. The bankruptcy trustee had the case dismissed for lack of payments. Now, the buyer’s attorney is saying that the transfer of title to the trust was illegal because it was done while the property was in bankruptcy and he won't clear title. Is he right? And, what are my options? Thanks in advance
Yep, he's right. You can't just deed the house over while HO's in BK.
Now that the case has been dismissed...now that's a different story. Go get the deed again !
I'm guessing you didn't have any title insurance/title report completed,huh ?
DOLLTT
While pahomes' suggestion is a good one, I'd advise you NOT to weaken & give up your very strong, legally, position since you do have the deed !
I've had lots of odd RE interests that made me $$$, although they were less than full title, and with deed, you have a strong position.
And to get some other opinions about whether & how to sell your de facto position (w deed), I'd be talking to one or two experienced title officers to see what they think.
The title was conveyed while the property was under Chapter 13 protection. This constitutes Fraudulent Conveyance and the B.K. Trustee could have easily voided/unwound this transaction-had the BK so desired..
Because the BK didn't keep/make payments, the Trustee revoked (can't think of the proper BK term) the filing.
I can see the attorneys point-of-view. The conveyance was an illegal transaction while the Chapter 13 existed.
The question is, now that there's no longer BK is the deed valid? I think it is.
The attorney would play h*** getting the
deed voided and it would be costly.
.