If the only purpose for the filing was to delay the foreclosure and if the petition has not been heard by the judge it will automatically be canceled if the person filing does not show up (or their lawyer) when it is time for the first court date.
Hence it can be very easy for the borrower to back out of the BK when it is just starting.
They may have other things going on so it might not be in their best interest for them to back out. That is up to them and their lawyer.
Posted by Matt(ATL) on September 10, 2005 at 16:45:28:
I have a possible deal in the works I wanted to see if I can get some input from you guys and gals. I had a seller call me who has filled bankruptcy to stop a foreclosure on his home. He told me those magic words ?I just want out of the house?, so I went out to take a look at the property it?s a nice brick ranch in the suburbs of Atlanta with a ARV of 135K but the property shows signs of sever neglect an old junk car in the front and back yard, rotting trim and the smell is the worst I?ve ever smelled, along with the dog pee that has stained the hardwood floors it should take less than 8k to fix it up. Any way the seller owes about 72K and I would like to jump on this one and flip it for a nice little profit. A couple of investors I?ve talked with told me that the bankruptcy trustee wont allow a sale with this much equity in the property and that they try to squeeze every drop equity out of a property before they will allow a sale. The only problem is this is my first attempt to do a bankruptcy deal and I don?t want to pass on it. I don?t have a clue as to where to start with this one, I would love to hear from those of you who have dealt with this sort of situation. Please help!
Is it a ch.7 or ch. 13 bk (this is important)? Have you seen the bk. petition (including the schedules)?. If not, ask the seller if you can see them- he should have a copy. What other debts is in listing in the bk.? Are you sure there aren’t other secured creditors (judgments, IRS etc.?). You need to know these things then you can decide how to move forward.
Provide more information and we can help you sort this out. Good luck.
Re: Bankruptcy deal. HELP!! - Posted by michaela-ATL
Posted by michaela-ATL on September 10, 2005 at 17:17:25:
Matt,
They’re right in that the bankruptcy trustee probably wouldn’t allow a lot of equitey. You mention, that the owner filed for bankruptcy to save the house. So, if he has a buyer for the house, he could cancel the bankruptcy filing, right? If he’s willing to do that, then he can do anything he wants to witht he house.