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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Our bankruptcy was discharged in August 2010. We were buying

Resolved Question:

Our bankruptcy was discharged in August 2010. We were buying a home on contract this was listed in bankruptcy, there was no reaffirmation papers filed with the courts. We verbally agreed to stay in home and finish out contract, however when contract was up we could not get financing, the owners were not willing to do an extension, so now we are getting ready to move out and turn house back over to owners. What legal recourse do they have to collect on outstanding balance?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.

Hi JACustomer,

1) You said, "...when contract was up...". If the contract is up, what outstanding balance is there?

2) Were the sellers listed as creditors in the Bankruptcy filing?

Customer: replied 6 years ago.
We could not pay off the $15,000 remaining when contract expired. Yes they were listed in the bankruptcy filing.
Expert:  cfortunato replied 6 years ago.

Since the debt was listed in the Bankruptcy petition, and since it was not re-affirmed, there is nothing the sellers can do if you do not pay the balance.


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

Customer: replied 6 years ago.
they keep saying they can do a forfeiture and garnish our wages, what does the forfeiture mean? We have not moved yet but will be in next 2 weeks.
Expert:  cfortunato replied 6 years ago.

They are mistaken, or they are trying to scare you.

"Forfeiture" means they are giving up their right to collect any money for the contract. They cannot get a judgment for the balance of the contract, because the liability for the balance of the contract was discharged in the Bankruptcy, similarly to what happens to mortgages that are included in Bankruptcies.

cfortunato and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 6 years ago.
Thank you. This is what I have suspected but was not definate on the answer.
Expert:  cfortunato replied 6 years ago.
You're welcome! And thank you for accepting my answer!