Posted by Joe Kaiser on May 02, 2005 at 19:11:45:
Nope . . . she doesn’t own the house and it’s not a part of her
bankruptcy estate. The automatic stay impacts her liability and may
prevent the lender from foreclosing . . . but the asset itself no longer
belongs to her and won’t be effected.
Sub2 seller claim bankruptcy…what happen? - Posted by Amanda-NY
Posted by Amanda-NY on April 30, 2005 at 10:37:42:
I came across the situation which I don’t understand how to deal with. This is not the deal I am dealing with; however, I would like to know the answer.
Here is the situation.
The owner of the house (mother) recorded deed to her son.
The son lives in the house and make payments for the mortgage. (it is technically sub 2). So legally the son is the owner of the house and mother is responsible for the mortgage.
The mother has financial problem and claimed bankruptcy recently. (lowyer hasn’t filed yet)
My question is when she claims bankruptcy, is the house going to foreclosure? Or it won’t since the house is legally owned by her son? I’m not sure if the son makes payments on time or not, but I know the fact when he can’t make a payment, she (mother) helps him and made a payment.
Thank you for your help!
Re: Sub2 seller claim bankruptcy…what happen? - Posted by David Alexander
Posted by David Alexander on May 01, 2005 at 24:48:52:
The house won’t go to foreclosure if the payments are current…
And if the payments are current it will be as nothing has ever happened to the house…
The mother can also have the house left out of the BK… depending on the trustee…
If the transaction was done before all this No BK trustee is going to unwind the deal on a house that has current payments…
We’ve done a ton of these and just pulled them out of the BK’s… Now this is when the BK is for ReOrginazation…
Re: Sub2 seller claim bankruptcy…what happen? - Posted by Kim-OH
Posted by Kim-OH on April 30, 2005 at 12:40:21:
The BK trustee can unwind the sales transaction, particularly if there is any equity in the property. This depends on how long ago the deed was transferred, most look backs are for a 1 year period but can look back as long as 4 years.
If there is no equity in the property then the BK trustee might be inclined to release the house from the BK action. The buyer, son, would have to request the release of the property.
Re: Sub2 seller claim bankruptcy…what happen? - Posted by Joe Kaiser
Posted by Joe Kaiser on May 01, 2005 at 18:30:01:
Doubtful. Mom’s bankruptcy will have little or no effect on son’s
house, provided it was a bona fide transaction. There’s nothing to
release since it’s not mom’s property any more and certainly not an
asset of the estate.
Re: Sub2 seller claim bankruptcy…what happen? - Posted by whyK-CA
Posted by whyK-CA on May 01, 2005 at 20:44:11:
Joe, doesn?t the mother have to include the mortgage in her bankruptcy paper as one of the creditor? Doesn?t that put the house in automatic stay? -whyK