Posted by David (Los Angeles) on February 10, 2005 at 02:44:35:
I believe in Chapter 13, it’s the Court, not the trustee, who has to approve the sale of assets. About all the trustee does under Chapter 13 is collect and disburse payments.
Buying Property While Seller is in Chapter 13!!! - Posted by Michael Herring
Posted by Michael Herring on February 03, 2005 at 15:34:30:
A Seller contatcted me to say that he no longer wanted to keep his house. He is two months in arrears.
We agreed in principal that I would pay him $8,000, and he would Deed the $232,000 property over to me in a Land Trust. Does he have the authority to do this since he had filed for Chapter 13 back in Nov? I read somewhere that the Court Appointed Trustee has control of the property once you file for Bankruptcy. Please advise. URGENT!!!
Re: Buying Property While Seller is in Chapter 13 - Posted by David (Los Angeles)
Posted by David (Los Angeles) on February 10, 2005 at 03:18:55:
The Trustee only has control of the assets if he files Chapter 7. Under Chapter 13, he can dispose of assets with the Court’s approval. As long as his payment plan has been approved, and his payments are being made, there should be no reason for the court to withhold approval.
What you need to be careful of is this: Often, people who file Chapter 13 can’t (or don’t) make the payments as they’ve agreed, and after their Chapter 13 is dismissed they file Chapter 7. If he sells you the house now, and files Chapter 7 within a year of the sale, the sale might be unwound so that the creditors can get the equity in the property. Part of your due diligence in this case is to assess whether the seller is “willing and able” to meet the payment schedule under Chapter 13.
Buying Property While Seller is in Chapter 13!!! - Posted by chet
Posted by chet on February 03, 2005 at 22:03:38:
FYI:
there is a fee based ($.07)/page based system called pacer, where BK (almost all federal as well) cases can be reviewed.
Buying Property While Seller is in Chapter 13!!! - Posted by JohnBoy
Posted by JohnBoy on February 03, 2005 at 20:12:52:
If he is still in BK then the trustee must approve of any sale. While in BK the debtor can not sell any assets without permission of the trustee. And you can bet that the trustee is not going to let him walk away with the $8k. They will likely take that money to pay other creditors. Unless that $8k is within the homeowner exemption amount. If that amount falls within the homeowner exemption amount then he should be able to keep it. But either way, the trustee must approve of any sale while still in BK.
Is he still in chapter 13, or was it discharged or dismissed?
Re: Buying Property While Seller is in Chapter 13 - Posted by Michael Herring
Posted by Michael Herring on February 03, 2005 at 21:19:31:
JohnBoy, Thanks. The Seller is still in Cahpter 13. He has not had the Creditors Meeting or the 341 Meeting yet. As I understand it is scheduled for 02/15/05. I would think that it has not been dismissed.
Re: Buying Property While Seller is in Chapter 13 - Posted by JohnBoy
Posted by JohnBoy on February 03, 2005 at 21:35:58:
Then he can not sell any assets. Any assets he would like to sell at this point would have to be approved by the trustee. Otherwise he would need to have the BK dismissed and he would have to wait until it is dismissed before doing anything.
Even though he’s 2 payments behind, why does he want to sell now? If he’s filed BK and hasn’t had the meeting of credotors yet, there is nothing the lender can do at this point. He doesn’t even have to make any payments until the plan is approved by the court. Then once the plan is approved any back payments can be paid off seperately over the next 5 years and he would just resumew the regular payments at that time.
Regardless, if he wishes to sell, the trustee has to approve it or he has to have the BK dismissed and wait until the court dismisses it before selling anything. If he moves to dismiss the BK just remember that if plans to refile again the court could still look back up to 4 years and recind the sale if they feel there was to much equity involved. In most cases they only look back a year, but could look back as much as 4 years.