Lis Pendence & Bankruptcy
I filed a Lis Pendence on a property which the seller was trying to back out on the day of closing. The seller refused to close by not signing the Grand Deed. She did however sign everything else.
After the Lis Pendence has been filed for several months, the seller is pulling a new trick - filing for Chapter 7 bankruptcy.
What does it mean and what should I do at this point?
If according to the Bankruptcy Court the seller is held insolvent or becomes insolvent as a result of transferring his/her property to you, the Bankruptcy Court trustee will probably use its avoiding power to overturn your transaction, via Section 548(a)(B)(i) which reads:
Sec. 548. Fraudulent transfers and obligations
(a) The trustee may avoid any transfer of an interest of the
debtor in property, or any obligation incurred by the debtor, that
was made or incurred on or within one year before the date of the
filing of the petition, if the debtor voluntarily or involuntarily
(B)(i) was insolvent on the date that such transfer was made or
such obligation was incurred, or became insolvent as a result of
such transfer or obligation;
I hope this help.
Quote:
On 2005-07-15 19:16, legalmatter wrote:
I filed a Lis Pendence on a property which the seller was trying to back out on the day of closing. The seller refused to close by not signing the Grand Deed. She did however sign everything else.
After the Lis Pendence has been filed for several months, the seller is pulling a new trick - filing for Chapter 7 bankruptcy.
What does it mean and what should I do at this point?
nullone yearnull[ Edited by Darryle-CA on Date 07/16/2005 ]
It sounds like the trustee has the power to make a final decision? Even so, how do I notify the trustee of the contract and see if the trustee might consider the matter?
In addition, I still have earnest money in substantial amounts stuck in the original escrow company. The seller is not going to agree to release it, as they are not people who have reasons. How can I get the money released from the escrow company, given the situation of the transaction?
Your help is greatly appreciated.