Ch 13 Bankruptcy Short Sale
Really want to buy this house. In Ch 13 BK. Owner wants to sell to me. Trustee won't speak to me. Set for aution next month. Could I write an offer to purchase and fax to Trustee? Don't want to wait until the auction because 2nd is for $80k, 1st is $195k. If 2nd bids on the house, I will not be able to afford it at auction. Comps out at $240k.
cindyseki,
just worked with a seller in similar situation - couple of things:
if the seller is working with a lawyer on the bankruptcy, they need to ask them to file a motion to dismiss...I believe that they themselves can go to the courthouse and file paperwork for bankruptcy proceedings dismissal. Once you have the paperwork from the judge confirming dismissal, you can proceed with your offer to the bank - make sure that you include the dismissal letter with your short sale package.
dismissal of the bankuptcy should take about 7-10 days, if not sooner.
good luck!
Thanks for the advise. Brings up another question. If I cannot get the bank to short sale low enough for me to buy the house, what happens to the homeowner after filing the Motion to Dismiss? Does the foreclosure simply proceed as already scheduled without any additional harm done to him?
That's correct. The foreclosure would proceed as it would otherwise.
Cindy,
I'd advise against having the homeowner have their Ch 13 dismissed. First, in a Ch 13, the trustee is not involved (which is different from a Ch 7). Second, the homeowner's attorney just needs to file a motion to approve the sale of the home. That process will take approximately 30 days.
Let's say you advised the homeowner to dismiss the Ch 13 BK and you couldn't get a short sale. They could come back to you and say you were responsible for them losing their BK protection.
They need to consult their own attorney if they want to sell the house to you.
I have been told, that the trustee does need to consent for the owner to sell the house. I am currently working on a short sale now in this situation. The bank said they can not work with me until the trustee agrees that the seller can sell the house. I don't really understand it since the bank will foreclose without the trustee consent anyway.
Somebody has to file a motion to sell and all parties need to be notified and not object. Objections will cause a hearing and the court will decide. Objections with merit will cause the deal not to happen. Seller should keep the BK protection as long as possible. Can not have foreclosure if under BK protection. You got wtong info somewhere unless the property is nonexempt property and no longer protected. In that case you will not need court approval as the property would have already been released from protection. You need to find out the status
Good LUCK and Thank You
Hope this helps some
Ted Jr