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JP
JP, Attorney
Category: Bankruptcy Law
Satisfied Customers: 109
Experience:  Represented creditors and individuals in bankruptcy and consumer matters.
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Can an estate file bankruptcy A real esate property is in

Resolved Question:

Can an estate file bankruptcy? A real esate property is in foreclosure, but the original borrower is deceased. Can the heir file Chapter 13 bankruptcy to work out some kind of plan?
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  JP replied 3 years ago.

JP :

Good Morning,

Customer:

Hello

JP :

Yes, the surviving heir can file bankruptcy and stop the foreclosure of the property, if the surviving is actually on the Deed for the property or there is some legal document showing that the property now belongs to the surviving heir.

JP :

It does not matter that the heir did not borrow the money from the lender. What matters is whether the heir is the owner of the property itself

Customer:

What if a will exists but it has not been probated?

Customer:

So, the property is still in the name of the deceased.

JP :

Is the real property commercial, residential or an unimproved lot?

Customer:

residential... and it is the residence of the heir.

JP :

great

Customer:

why is that great?

JP :

1) Although the will has not been probated, if the debtor is a rightful heir to the property according to the laws of intestacy in Oklahoma then the property will still be protected because the heir's interest in the property will be protected by the automatic stay.

Customer:

ok. suggestions?

JP :

2) Considering the heir resides in the property, the automatic stay in bankruptcy will protect the property from foreclosure because it is the heir's residence.

JP :

Here are some suggestions:

JP :

Have the heir commence a chapter 13 bankruptcty proceeding to stop the foreclosure sale

JP :

Then have the heir contact a probate attorney in Oklahoma in order to determine what steps will need to be taken to have the heir placed on the county records as the current owner of the property

JP :

Once the banruptcy case is filed, the heir would need to contact the lender with the bankruptcy case number XXXXX possibly a copy of the petition or notice of bankruptcy in order to stop the pending foreclosure sale.

JP :

Once in the chapter 13 plan, all debts that touch and concern the property will automatically be placed into a 36 to 60 month repayment plan

Customer:

ok, so is the heir filing bankruptcy or the estate? I think this was my original question? Sorry, I don't know much. :-)

JP :

The heir is filing the bankruptcy.

Customer:

but in the heir's own name? Or the estate's?

JP :

Once the heir files the bankruptcy, he or she will include the property as an asset in their bankruptcy case and list the

Customer:

I guess a better question would have been, is the heir going to have to pay all the mortgage balance on the property?

JP :

In the heir's own name

Customer:

OK, I think I got it.

JP :

If the heir desires to maintain the property they will have to pay the outstanding balance on the mortgage

JP :

even through the bankruptcy

JP :

the bankruptcy will stop the foreclosure

JP :

but

JP :

if the mortgage is not paid, the mortgage company will be allowed to be relieved from the protection afforded by the automatic stay and the court will allow the lender to foreclose on the property

JP :

the real property can be protected if it is an asset of the heir (ie inherited property from a deceased relative)

JP :

but unfortunately, the underlying mortgage obligation must be paid in order to maintain possession

Customer:

so, the heir would have to file Chapter 13?

JP :

yes, the heir would have the file the chapter 13 individually

JP :

list the real property as an asset

JP :

and pay the underlying mortgage

Customer:

OK, thanks for your help.

JP :

Anytime

JP :

You're Welcome

JP, Attorney
Category: Bankruptcy Law
Satisfied Customers: 109
Experience: Represented creditors and individuals in bankruptcy and consumer matters.
JP and other Bankruptcy Law Specialists are ready to help you

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