Bankruptcy question
I am a new PreForeclosure Investor - what an exciting and challenging market! I found this great forum by doing a search in Google and this came up in the second or third listing. I have spent hours reading posts and looking for one of my questions and didn't see anything posted, so here goes:
I found a property that has some/not a lot of equity and the homeowners are 2 weeks away from the auction. They tried to file a Chapter 13 Bankruptcy but were told that they did not have enough income to qualify for the 13. They have deeded me the property and we have it in a Land Trust right now.
My question is, can our Land Trust file Chapter 13 Bankruptcy and stop/stall the auction so that I can negotiate the short sale and find a new buyer to come in?
Thank you in advance for any input the experts that moderate this board and all of the rest of you might give to me.
CCWas:
Are you leasing the home back to the Original owners?
Are you looking to short sale it?
If they were denied the Chapter 13 due to lack of income to carry the BK Plan then their ATTY. could 'Amend' their original plan using a Lease to the Trust to pay up arrears on the mortgage.
This could be shown as DEBT-RELIEF (added income enough to pay the mortgage, arrears, taxes, insurance, etc.);
thus giving them (you) the PROTECTION of the BK Court from the foreclosing Lender.
If I were you I'd line up a prospective buyer B4 'the Meeting of Creditors' date in BK court...
I'd also work with the lender having an Auth-to-Discuss form signed by the BK owner to negotiate
a) Forebearance if released from BK
b) Modification of the mortgage loan payment and terms if released from BK
or
c) A Short Sale purchase to You Offer to Purchase + 'Net sheet'
Once I've got the Lender to agree I'd MKT this property to my prospective buyers located from my own network of:
-Fellow RE Investors,
-Contractors,
-Realtors,
-Attorneys
And/or from Ads placed in the local Newspaper or Shopper!
By the time the BK13 Creditors Meeting comes up the owner could have the JUDGE to DISMISS the 'Amended' BK13 ...cuz you've ALREADY prevented the Foreclosure and the got the property SOLD!
I hope this helps!
DERRICK ALI
[addsig]
Thank you for your reply Derrick. The homeowners are not going to lease back the property - they are walking away from it. They are not in Bankruptcy yet - they went in yesterday for their first appointment with an attorney to file and were told they couldn't even file a chapter 13 because they didn't have enough income to even start the proceedings. They have deeded me their house and I put it into a Land Trust and I was wondering if that Land Trust could file the Chapter 13 - I may have answered my own question. With such a short time before the auction, we are just looking for some quick fix answers.