Bankruptcy And Contract Assignment To Renter
I own two homes and am making mortgage payments on both of them. I make one payment from my income and one from rental income from the second property. Due to a recent divorce, I am going to file bankrupcy. I would like to do this before the new laws take effect in October. I want to sell the second home that is currently being rented. The rentor would like to buy this home, but has terrible credit, also due to a messy divorce and excessive credit card debt. However, he has steady income and has never been late on a payment. The renter can give me $20,000 and take over the mortgage payment of $675. I want to sell him the property or allow him to take over the payments, but I want to keep the current home that I live in. Can I sell the renter this home under a take over payment contract or owner carry contract? Can I do this without needing a credit report for the renter? If so, can or will this property be sold out from under the renter in my bankruptcy? 
Sorry - but they are trying to screw you. If they had confidence in their house, they would allow an inspection. They have something to hide.
Tell you will get an inspection and if there is something objectionable, you will simply back out of the contract for unspecific reasons and not tell them of the specifics.
Brenda
by the way...i live in california...does the 1031 esxchange law the same in every state?
yaweh
1031 Exchanges only apply to investment property. The sale of your primary residence would actually fall under Section 121 ("121 Exclusion"
. You can exclude up to $250K of capital gain if you are single and up to $500K of capital gain if you are married and filing a joint income tax return, provided you have owned and have lived in the house for at least 24 months out of the last 60 months.
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