Deal W/owner In Bankruptcy
I have a current deal where the owner is in bankruptcy. She wants to have it dismissed. How long does that normally take and how does it work? She doesn't want to stay in it. She wants to sell fast. She then wants to file for a Ch 7. She is currently in Ch 13.
I would be very concern about bankrupcy w/ knowing all the ins and outs.
Too many unusual rules.
How long is the dismissal process? :-?
It's very likely that she has an attorney handing the BK for her. Have her ask the attorney how to make the sale happen. Very likely the Bankruptcy Trustee will need to be involved. It is probably just a formality to have him sign off on the sale. Any profit she makes from the sale may be used by the courts to help pay off the debtors as part of the Ch 13 BK. What happens after you purchase the house is not your concern. As long as you are not trying to hide the sale, or do anything shady, There shouldn't be a problem. Just a few more steps in the process. Let the professionals involved in the Bk process advise you. It's really just a matter of asking the right questions and following through.
Jeff
Its my understanding that Ch13 is essentially a court approved process of paying off the debt that a person has. Dismissal generally happens years down the road when the debtors have been paid Chapter 7 involves dismissal of the debt. No payment schedule etc. The process here in AZ takes 3-6 months in a Ch7 BK from the time of filing until the person(s) are determined to be bankrupt and a discharge is signed. The person(s) filing for bankruptcy protection must be able to demonstrate that they are not able to pay down the debt. If they have enough income to pay the debt, the courts will reject their petition. It's not as simple a process as filing Ch 13, and then filing for Ch 7 when you're ready.[ Edited by jeff12002 on Date 05/26/2004 ]
Jeff is offering very good advice.
A sale done just before a BK can be voided if it was use to shift assets. Hence you really need to do this by the book and with full disclosure.
John
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