Real Estate and Bankruptcy
I am under contract to buy a house in NJ. I just discovered seller is behind on payments (Lis Pendens was filed). I also discovered seller filed for bankruptcy (Chapter 13) he is on a payment plan and currently making payments. What does this mean to me as the buyer of the property, am I at risk? What steps should I take to ensure deal does not fall through? Is the seller able to sell his property? Any suggestions will be appreciated. Thanks.
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There are a loy of vaiables in bankruptcy. In general you will need to get the trustee and court to approve the purchase. You should probably spend a few hundred dollars for a lawyer experienced with BK and real estate. This is not a do it yourself job and for sure don't just rely on the real estate agent.
Thank you for your reply
Yes, you can still work a short sale,
however, the court must approve the sale, the Trustee will likely require a "fee" and the debtor must file a "Motion to sell"
If the debtor is going to recieve any proceeds from closing, they will likely need to contribute the proceeds into the Chapter 13 "Plan."
A great place for info would, of course, be the homewoners BK attorney. Get in touch with them. Explain your position.
they will need to file a motion to employ (if you are using a broker or RE agent).
good luck
Thanks for your info.