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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
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Experience:  Bankruptcy professor.
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Hi! My husband and I purchased a rental property in an expensive

Customer Question

Hi! My husband and I purchased a rental property in an expensive resort area with another couple. The property was sold via a short sale a couple of months ago. The agreement with the bank was to pay $300,000 - $150,000 immediately and the remaining $150,000 over the next 15 years. All four of our names are XXXXX XXXXX loan documents. My husband and I paid the $150,000 that was required immediately because our partners could not. Now our partners have informed us that they are filing for bankruptcy (Chapter 7 I believe). My husband and I are now making the payments on the $150,000 balance also because our partners say they don't have the funds. Is there anything we can or should do legally before they file for bankruptcy to try to at least get some of the $150,000 that they owe?
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 3 years ago.

Hi JACustomer,

There is something you can do. But this can only help you if it is done before the Bankruptcy is filed. Once the Bankrutpcy is filed, there will be little - if anything - you will be able to do to get some of the money your friends owe.

You would have to sue them now, get a judgment, and attach the judgment to any property they currently own. If attached to "non-exempt" property, that attachment, which works similarly to a mortgage, can survive the Bankrutpcy. Unfortunately, if your friends have no property to attach, there is really nothing you can do to get what is owed to you if your friends file a Bankruptcy.

 

I think this is what you wanted to know. If not, please let me know.
Thank you!

 

 

 

 

Customer: replied 3 years ago.

Will the bank be able to recover any of the money due or will they just ask us to pay it. What kind of property is non-exempt? How do I know what to attach the judgment to?

Expert:  cfortunato replied 3 years ago.
Here is the list of exempt property for Georgia:
http://www.thebankruptcysite.org/exemptions/georgia.html.
Anything they own that is not on this list is non-exempt.
For example, if they own a house with $30,000 equity, you would be able to attach $10,000 worth of equity ($30,000 minus the $20,000 homestead exemption).
If you are paying the debt, the bank will not try to get the money from them. If they file a Bankruptcy, the bank will not be able to try to collect the money from them.
Customer: replied 3 years ago.
But how do I know what property they have that is paid for? I don't know what the equity is in their house if any. They have expensive cars (Lexus) but how would I find out if they are paid for? I have been told that it will cost us $2200 to file the judgment. I don't want to throw away any more money.
Expert:  cfortunato replied 3 years ago.

If you sue them, you can request "discovery" concerning their assets. This can be an oral deposition or a written interrogatory, which they can be ordered to answer under oath.

Expert:  cfortunato replied 3 years ago.
Hi again,
Please let me know if you have any further questions.
If not, please don't forget to hit the "ACCEPT" button.
Thank you!

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