Posted by Ronald * Starr on July 05, 2001 at 21:39:58:
JohnBoy-------
I like your post and your thinking. I think you gave good advice here. Good Going Guy!
Good Investing and Good PostingRon Starr******
HELP! Am I exposed?? Trustee’s sale and BK - Posted by DJ-NV
Posted by DJ-NV on July 05, 2001 at 11:17:07:
Hello,
About a month and a half ago I purchased a house at a Trustee’s sale held on the courthouse steps. Immediately AFTER the sale, the owners (former), filed for chapter 7 bankruptcy. Within the next week , I received and recorded the deed and figured all was well. Once I recorded the deed, I got in contact with the debtors and they agreed to turn over posession of the house within thirty days.
Well thirty days has come and I just received a letter in the mail from their attorney stating that his clients (the former owners), will not give me possession of the house and that I am prohibited by the automatic stay provision of the Bankurptcy Code, 11 U.S.C. Sec. 362, from taking any act or commencing any legal action against the debtors to obtain possession of the property.
There is a bankrupcy hearing scheduled for the 19th of this month. Am I in danger of losing the house?
I have an appoinment scheduled with an bankruptcy attorney this afternoon to give me a better idea of what is going on, but I would really appreciate your thoughts on my situation as well.
Thanks for all your help,
DJ
BTW: The house in question has significant equity.
Re: HELP! Am I exposed?? Trustee’s sale and BK - Posted by DJ-NV
Posted by DJ-NV on July 07, 2001 at 11:01:22:
Thanks for taking the time to offer your advice regarding my situation. After
speaking with the attorney Thursday P.M. I am doubly motivated to get ain touch
with other attorneys in my area for a second opinion. Unfortunately all of the
attorneys I called before my meeting were on vacation until Monday, but after
reading your responses I didn’t feel that my attorney’s retainer request of $700.00 to
file a Lift of Stay was reasonable. Nor did I really get the feeling that he had a solid
plan of attack. I wouldn’t mind paying $700.00 or even more if I knew that this
guy was on the right track and knew what he was doing. At one point, after I
explained how I bought the property at a Trustee’s Sale he told me “Well see what
can happen when you buy property that way, I hope you learned a lesson.”
Unbelieveably arrogant!
I’m going to get other opinions on Monday and hopefully I’ll come in contact with
somebody who may actually understand my situation and be able to help.
Once again thanks for your help. It’s good to know that there are people out
there who really understand REI and that I am, in fact, not alone in the
Wilderness!
DJ
May be EXPOSED ! - Posted by JT - IN
Posted by JT - IN on July 05, 2001 at 20:00:49:
DJ-NV
Whether or not, this former owner has any redemption rights, depends upon the laws of NV. I am not familiar with an owners redemption rights in NV, and after you meet with the Atty today, I’m quite sure that you should be.
JohnBoy has given you a pretty good outline of the situation. My only caveats are whether the former owner could withdrawl the Chap 7, or convert ot a 13, and redeem the property, pending the laws and owners rights in the state of NV. This is not uncommon, for an owner of a property, following a foreclosure sale, be able to buy the property back, subject to the laws of the state where the proeprty is located. I could certainly tell you that if you were in Ohio, as example, the owner could still emerge from a Chap 7, and regain ownership of this property. Hopefully, you will not have such an experience.
Inform us as to what you find out from the Atty visit, this PM. Good Luck!
JT - IN
Re: HELP! Am I exposed?? Trustee’s sale and BK - Posted by JohnBoy
Posted by JohnBoy on July 05, 2001 at 11:59:19:
I don’t think you can lose the house since the house was already foreclosed on and sold at public auction. Also, I think the debtor can’t reinstate on the house filing a chapter 7. I think they would have to file a chapter 13 to keep the house.
The problem I think you have here is that even though you purchased the property at auction and since the owner still occupys the property you will have to still file for eviction to get them out. The filing of the chapter 7 puts an automatic stay preventing you from filing for eviction. Now you will need to motion the BK court for a lift of stay. Since they are filing chapter 7 and the property has already been forclosed on and sold at public auction, you shouldn’t have a problem getting the lift of stay. They no longer legally own the property nor do they have a lease agreement to stay in the property.
All this does is buy them another month or so to live in the property, depending on how fast the court moves in your area. If you’re in an area where the case is being held at a local federal court then the process should move along much quicker. If the federal court is out of your area where a federal judge has to come to your county and use a court room at your county courthouse the process could take a little longer since the federal judge may only come there once every 2 - 3 months.
The BK attorney you speak with today will be able to explain the process better. I would tell him to file a motion to lift stay immediately to get them out as quickly as possible.
The attorney shouldn’t charge you more than $100 - $200 to take care of filing the motion. If he/she charges more than that then call around to other BK attorneys and get some price quotes. In fact, you might want to call around before you go see this attorney so you know what others are charging a head of time.