bankruptcy question

[Kali]

guy buys a property, pays half up front then doesn't make the balloon payment for balance when due, strings original owner along for 6 months, then cons owner with some small amount into giving him another 30 days. on day 29 he files for bankruptcy.

what happens next? (assume this is his main debt)

[former9thward]

1. The original property owner has a claim in bankruptcy court.

And should promptly file that claim. If this is you I advice consulting an attorney to do this since I assume the property is worth a significant amount of money.

[Kali]

2. no, it is a neighbor

I would love to pick it up but yes a pretty significant amount of money and I can't do it. The original owner does not want the property back. I think they are foolish and stupid. The whole thing is heartbreaking because the place is so beautiful. Buyer was a shitty developer. Next buyer will likely be similar.

Attorneys are doing well on this deal, I think. LOL, even I had to hire one to deal with the buyer over an easement issue.

[Sneederbunk]

3. Hopefully owner has a mortgage in property.

[Kali]

4. you mean a regular mortgage?

I have never heard of "mortgage in property" (actually I barely know about mortgages at all) I don't know too many details, it was about to be foreclosed on in August, there were notices posted on the entry.

[Sneederbunk]

5. Somebody has a mortgage if there is a foreclosure.

Bankruptcy temporarily stays the foreclosure. Owner needs to get to real estate attorney ASAP

[Kali]

6. I am sure they have one (or more) by now

this guy is a piece of work.

[Stallion]

7. Usually the Owner Files Motion to Lift the (Bankruptcy) Stay

so he can continue to post property for foreclosure. He will need attorney to prepare Motion. From there it gets more complicated based on whether its a business or just residential property, whether bankrupt files Ch. 7 (liquidation) or Ch. 11 (Reorganization) or Ch. 13, whether the bankrupt has equity in property, the other types of creditors, whether the property will be abandoned by the business (if any) etc. Usually a mortgagee (owner) has priority over most creditors-maybe not the IRS. Could be a second lien holder situation too which brings in more complications. Owner could have subordinated original mortgage to second lienholder

[Kali]

9. there might be some mechanic liens

but for lesser amounts. I wonder which bankruptcy it is, and I imagine that is public info. the guy is a slimeball, has lots of shell companies and paper entities to hide behind. He is a liar and thinks he can get by on fake good-ol-boy charm (and he did on that sale) but he has left a trail of bad deals in this county and I sure hope it catches up with him soon.

[snort]

11. OMG OMG OMG!

Its dRumpf! right?

[Kali]

12. a tiny local small time wannabe, maybe

this guy does have a better tan and hair, at least.

[PoindexterOglethorpe]

8. Are the payments only to the original owner?

Or to the bank that holds the mortgage?

[Kali]

10. that I don't know for sure, but from the way things went this summer it kind of seems like

they were going right to the owner. the foreclosure was supposed to happen a month ago and I hadn't heard anything so I called the owner and they said they gave him another 30 days, but I later heard from a reliable source that a little more money changed hands to make that happen.

There is a couple staying on the place as caretakers, I wonder what happens to them?

[PoindexterOglethorpe]

13. You are missing a lot of information.

Who is being paid, who holds the mortgage, what the actual terms are.

It's going to be interesting to watch it play out.