Posted by JohnBoy on August 31, 2004 at 10:27:09:
Depends on how much time elasped from when the seller sold the property and when they file the BK, and how much equity was involved. Typically the courts will look back the first year and if there was enough equity involved they could recind the sale. If little to no equity was involved they probably would do nothing.
However, if the seller files BK then it is likely they will file against the mortgage on the property to have that debt discharged in the BK since they no longer own the property. That leaves the lender with no one on the loan personally responsible. So the lender “could” call the loan if they wanted too, but usually it is unlikely they will if the payments have been being made on time and the loan is current. Chances are the lender will just continue to accept the payments.