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WA Bankruptcy Lawyer
WA Bankruptcy Lawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 25
Experience:  30 years practice. Author of several articles.
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How do I buy a house from a seller who has filed a chapter ...

Customer Question

How do I buy a house from a seller who has filed a chapter 13 bankruptcy?
The seller wants to sell, the house will be going to Foreclosure within 4 days. There is a 1st mortgage ($92K) with backpayments of about $6000.00, and the house needs over $30,000.00 worth of repair. The house should be worth $140k in good condition.
Submitted: 9 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 9 years ago.
I can assist you. Please clarify that the house is being sold in a foreclosure sale. You want to buy the house at the foreclosure sale or from the ch 13 debtor? Does the Ch 13 debtor plan to have the Ch 13 dismissed?
Customer: replied 9 years ago.
FROM THE DEBTOR. The chapter 13 was filed 2 years ago, and has not been discharged. The debtor did not indicate whether she was going to get it discharged. Would the bankruptcy official etc.. be willing to set aside a chapter 13, so that I could complete the purchase, the seller would not be receiving monetary benefits? or can I purchase the house for all cash despite the seller having an undischarged Chapter 13 in her name? (The house needs about $30,000 worth of repairs, it has a 1st mortgage of $92,000- this is the mortgage that's being foreclosed upon). She has backpayments of about $10,000, the seller will not be receiving any money from the sale, she just wants to reduce her credit damage).
Expert:  Ellen replied 9 years ago.

I am going to refer you to our bankruptcy experts.

Best wishes.
Customer: replied 9 years ago.
Do not refer me to your bankruptcy experts, I am not willing to pay additional money.
Expert:  WA Bankruptcy Lawyer replied 9 years ago.
The only way to do this is through the bankrupcty. You need to make an offer to the debtor and get it accepted. You also need to get court approval to the sale. This is done by making a motion to the bankruptcy for what is called a sale free and clear of liens. The court then sets a hearing. It can stay the foreclosure if this process is going on. Similarly, with the real estate market the lender would rather have money than property so they may continue the sale if a purchase, with ready cash, is available.

You really need a lawyer familiar with bankruptcy process where the house is to do this well. The process is easy but you need someone who knows the procedures and the parties. Also you need the debtor and the debtor's attorney's cooperation. Ordinarily the debtor's attorney can do most of this work but you look so much more credible when you have your own lawyer.