Should I proceed? - Posted by RonH(MD)

Posted by RonH(MD) on June 08, 2003 at 13:57:48:

Thanks Brian,

That clears things up for me.


Should I proceed? - Posted by RonH(MD)

Posted by RonH(MD) on June 08, 2003 at 10:45:28:


I have a possible deal on a house whose owner is in bankruptcy. I would like to do a lease option. Can I make this work? How should I protect my self legally? Any suggestions will greatly appreciated.



Re: Should I proceed? - Posted by B.L.Renfrow

Posted by B.L.Renfrow on June 08, 2003 at 12:58:34:

This question, or some variation thereof, has been asked and answered about a dozen times, just in the last few days. Read through the posts below for plenty of discussion on this topic.

The short answer is, if the owner is already in bankruptcy, you can’t without permission of the bankruptcy court/trustee. It is a federal crime for the debtor to dispose of any assets without the court’s OK. Some trustees will allow a debtor to sell on a land contract and some won’t. I’ve never heard of a trustee permitting a lease option. The court’s main concern will be if significant equity exists, they will want to be sure it goes to the creditors.

Brian (NY)

Rents payable to Trustee… - Posted by JT-IN

Posted by JT-IN on June 08, 2003 at 14:18:51:

The rents payable on any property that is an asset where an owner has filed BK should be paid directly to the Trustee. The only deviant here would be if the Trustee releases the asset from the BK due to it having no appreciable equity, then the disposition of the asset and any income would be fair game for the owner and tenant/buyer to negotiate.

Any deal that is reached w/o the sanction of the Trustee is subject to be set aside, and the risk of such isn’t worth taking.