Comments
jeannine richard wrote:
I have a question. We entered into a land contract to sell our home. The prospective buyers have defaulted the contract from it's inception. Monies have not been exchanged for a downpayment or rent now. The electric is in thier name and due to shut off in 2 days.
What is the next step. Thank You
What is the next step. Thank You
29/10 11:05:09
refadmin wrote:
You will need to file a Forfeiture Notice Land Contract, form DC 101 in the judicial district in which the property is located. You can find the form at:
http://courts.michigan.gov/...
http://courts.michigan.gov/...
29/10 13:12:38
melissa wrote:
We filed bankruptcy about a year and a half ago and we sort of have a land contract (have a modular home in park) but we have a chance to get a real house and don't want this one any more. Can we just stop paying and move and it be covered under the bankruptcy?
26/12 22:23:21
Kim wrote:
What if you're the buyer and the seller files bankruptcy? Will you lose the property?
10/01 23:40:33
refadmin wrote:
A land contract vendee purchasing a property from a bankruptcy petitioner should make certain they are represented as a creditor in the bankruptcy proceeding.
In bankruptcy, the assets of the petitioner become the assets of the trustee unless they are exempt. If the property to be purchased pursuant to land contract is exempt meaning that the petitioner / owner gets to keep the property, then a land contract purchaser should be able to continue with the purchase.
In bankruptcy, the assets of the petitioner become the assets of the trustee unless they are exempt. If the property to be purchased pursuant to land contract is exempt meaning that the petitioner / owner gets to keep the property, then a land contract purchaser should be able to continue with the purchase.
11/01 22:42:18
refadmin wrote:
As to Melissa's question, I cannot answer more specifically other than to say that only the debts included in the petition are discharged. If only it were as easy as just stopping payment and moving.
11/01 22:47:47
glo wrote:
I am the seller in a land contract. I am thinking about filing bankruptcy and want to include the homes as to which I hold a land contract. However, I do not want the buyers to lose the homes as they pay on time and have placed money into the home.
Will the bank evict the buyers or will they have to honor the land contract and accept payment from the buyers?
Will the bank evict the buyers or will they have to honor the land contract and accept payment from the buyers?
06/03 19:37:38
refadmin wrote:
Bankruptcy Expert Attorney VICTORIA L. EASTERDAY provides that if you let the house go back to the bank, the bank will commence a foreclosure action. The mortgage company's rights are superior to those of your buyer who is legally referred to as a land contract vendee. Your vendee could obtain a mortgage and buy the property outright. You, as the vendor of the land contract could reaffirm the loan in the bankruptcy action, with the status quo maintained. If you chose not to reaffirm the loan, you should include the vendee as a creditor due to the potential claim against you for breaching the land contract agreement.
Additionally, review your mortgage for a due on sale clause. Such a clause prohibits the further sale of the home via land contract.
Additionally, review your mortgage for a due on sale clause. Such a clause prohibits the further sale of the home via land contract.
11/03 20:38:49
Bob wrote:
I have carried a note for the buyer on vacant land (5 acres). The buyer is 2 months past due. Can the buyer claim bankruptcy on this sale and if so, how does this affect me.
10/04 23:18:32
refadmin wrote:
The buyer can petition the court for liquidation of his debt in bankruptcy. If this happens, you would be included int he petition and thereafter notified as a creditor of debt the petitioner wants to either liquidate or reaffirm. You may not want the debt reaffirmed and may want to sell the property instead.
Before the buyer files for bankruptcy, consider foreclosing on the note. Once the petition is filed, you will have to file a claim for the past due money owed.
Before the buyer files for bankruptcy, consider foreclosing on the note. Once the petition is filed, you will have to file a claim for the past due money owed.
11/04 00:14:32
Shonya wrote:
My husband and I signed a land contract for 36 months. We have been in property for 8 months. The seller has decided to file bankruptcy. Is there anything we can do?
15/04 16:37:49
refadmin wrote:
If the seller lets the house go back to the bank, the bank will commence a foreclosure action. The mortgage company's rights are superior to yours as a buyer. You are legally referred to as the land contract vendee. You could obtain a mortgage and buy the property outright. The seller (or vendor) could reaffirm the loan in the bankruptcy action, with the status quo maintained. If the seller chooses not to reaffirm the loan, then you should be included as a creditor due to the potential claim you have against the seller for breaching the land contract agreement.
16/04 17:33:38
Dani wrote:
We are filing Chapter 7 in Wisconsin and are letting our mortgaged house go. Do we have to list property we having been paying on under a land contract in Michigan? We are current in our payments and want to keep on paying off the contract. We would like to move there when the bankruptcy is done, but at present we are not homesteading the Michigan property.
01/07 17:54:53
refadmin wrote:
Dear Dani:
Typically a bankruptcy petition must list all assets and liabilities and therefore, a contract to purchase property would be included. If there is little or no equity, the trustee would unlikely be interested in any event.
Typically a bankruptcy petition must list all assets and liabilities and therefore, a contract to purchase property would be included. If there is little or no equity, the trustee would unlikely be interested in any event.
01/07 18:03:03
Cyndi G. wrote:
We entered into a land contract a year ago, the sellers/vendors breached the contract early on, defaulting on two payments to the mortgage company and used the money we paid them to pay their own bills. They promised to make up the two payments, 8 months later, they've only made up one of the two defaulted payments. Now we've been approved for a morgage of our own and are ready to close, our contract states our purchase price is $203,000 but the seller's payoff came back at $210,000, they didn't pay down the principle with our downpayment last year as promised via the contract, they spent the downpayment on their own bills, now we can't close, they don't have the funds necessary to make up the deficit, so is this also breach, and if so, what recourse do we have?
06/07 20:21:59
refadmin wrote:
Your contract may have an arbitration clause which can bind your choice of forum for settling the matter. Your options for recourse are to sue for specific performance - that is to push the closing of the property and force the sellers to come up with the $7k payoff; or to call the contract breached, purchase another home, and sue the sellers for your damages.
Land contracts are messy and should be avoided as options for purchasing homes.
Land contracts are messy and should be avoided as options for purchasing homes.
07/07 16:43:11
mc wrote:
We were under a land contract for the home we were living in...my husband's ex-spouse filed bankruptcy on the home...which we did not find out about until a year later,we were still keeping up the monthly pymnts plus we started being charged the ex-spouse's legal fees???
Once we found out all this, my husband signed the house back to the bank, and they stated we were free and clear.
Now...2 yrs. later...the bank thru which the loan was with has sold out to another bank, and they are sending us letters stating we are seriously past due on an amt. of 10,500.00??? This is the first we have heard of this.They are threatening to put a lien on our chking acct and start wage garnishments...what can we do legally????
Once we found out all this, my husband signed the house back to the bank, and they stated we were free and clear.
Now...2 yrs. later...the bank thru which the loan was with has sold out to another bank, and they are sending us letters stating we are seriously past due on an amt. of 10,500.00??? This is the first we have heard of this.They are threatening to put a lien on our chking acct and start wage garnishments...what can we do legally????
04/09 09:53:02
refadmin wrote:
Dear MC:
You are going to need a lawyer to assist you in working this out. First, there is the issue of the bankruptcy, of which you should have been informed because you were a creditor. Second, there is the issue of signing the house back to the bank and the documentation you have for settlement on that. Depending on the documentation, this could be a quick fix. Third, if they are threatening a lien, you need to act quickly.
If you do not retain an attorney, you should explain the situation in writing to the bank, request a copy of all their proofs, and send the letter certified mail, return receipt requested.
Sounds like you could have a lawsuit on your hands against both the seller of the house and the bank that sold the loan. If you are sued, you could have third-party claims.
You are going to need a lawyer to assist you in working this out. First, there is the issue of the bankruptcy, of which you should have been informed because you were a creditor. Second, there is the issue of signing the house back to the bank and the documentation you have for settlement on that. Depending on the documentation, this could be a quick fix. Third, if they are threatening a lien, you need to act quickly.
If you do not retain an attorney, you should explain the situation in writing to the bank, request a copy of all their proofs, and send the letter certified mail, return receipt requested.
Sounds like you could have a lawsuit on your hands against both the seller of the house and the bank that sold the loan. If you are sued, you could have third-party claims.
04/09 10:41:39
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04/10: Bankruptcy and Land Contract Forfeiture
What does a land contract vendor (seller) do when he has served an eviction notice upon the buyer for non-payment of rent, and the vendee (buyer) responds by filing for bankruptcy?The bankruptcy filing puts a temporary stop on the eviction proceeding and places an automatic stay to prevent the seller creditor from proceeding with or continuing legal action against the buyer debtor. While the automatic stay of bankruptcy can stall eviction proceedings, the stay is not permanent as the seller can ask the court to "lift" the automatic stay. The courts usually grant such requests, which means that eviction proceedings can resume. Now the seller is a creditor and must act as any creditor in a bankruptcy case does and file proof of a claim. The issue then arises as to whether the land contract may be rejected as an executory contract by the bankrupt vendee.
What is an executory contract? In the context of bankruptcy, this is a contract that has not as yet been fully performed and is so far unperformed that failure to complete performance constitutes a material breach excusing either party's performance. 11 USC 365 provides that the land contract can be construed as an executory contract that can be assumed, assigned or rejected by the trustee in bankruptcy or debtor in possession. In the case of Terrell v Albaugh, (In re Terrell) 892 F.2d 469 (6th Cir. 1989), the Sixth Circuit Bankruptcy Court of Appeals found that a land contract was an executory contract because there were material obligations left to be performed by the parties to the contract. Since there were such obligations, the failure of either to perform them would constitute a material breach of the contract and therefore allow the other party to avoid continued performance. The alternative is that the contract would be treated like a mortgage securing the vendor's claim. Rather than an executory contract, the land contract is a sale with a continuing security interest with material obligations to be performed other than delivery of the deed upon payment of the purchase price.
Executory contracts are important in bankruptcy. They must be listed separately in the bankruptcy schedules and are not treated as any other unsecured claim in bankruptcy. Under 11 USC 365, the debtor or bankruptcy trustee may elect to assume (perform) or reject (refuse to perform) the contract within a certain time period, which is 60 days from filing in a Chapter 7 case. Furthermore, the vendor must perform as if no bankruptcy had been filed unless the court grants relief. If the contract is assumed, the debtor or bankruptcy trustee has to pay in full any outstanding payments and prove it can pay in the future too.
So, the bottom line is that the vendor's only recourse is to request the court to lift the stay to proceed with the eviction proceedings. However, since the law does allow the debtor to assume the contract by paying up, it seems likely that the court would allow the debtor the time allotted to assume. The creditor should file a motion to compel the debtor to make payments under the contract in accordance with the terms thereof, and force the debtor to assume or reject within a certain time period.