Comments
refadmin wrote:
Dear Trisha:
Once a bankruptcy petition is filed, the petitioner is granted an automatic stay which prevents any creditors from collection/activity as to any account identified in the bankruptcy petition. If you are named as creditors with a debt owed to you by the petitioner, you will be prevented by the automatic stay from evicting the petitioner. The only way to get around the automatic stay is to file a motion to life the stay.
Once a bankruptcy petition is filed, the petitioner is granted an automatic stay which prevents any creditors from collection/activity as to any account identified in the bankruptcy petition. If you are named as creditors with a debt owed to you by the petitioner, you will be prevented by the automatic stay from evicting the petitioner. The only way to get around the automatic stay is to file a motion to life the stay.
02/11 13:08:07
Trish wrote:
My husband and I are the sellers of a land contract. The tenant was 3 months overdue on her mortgage so we filed eviction. She is now filing chapter 7 bankruptcy and is 6 months overdue. If the court allows her to put the land contract in the chapter 7 can we still evict her?
02/11 12:25:01
refadmin wrote:
Dear Suzan:
I do not know WI law, however, typically basic law is similar among the States. Therefore, generally speaking under contract law, you are obligated to the terms of the contract. Therefore, typically if you do not fulfill your obligations, you can be forced to do so in a court of law.
I do not know WI law, however, typically basic law is similar among the States. Therefore, generally speaking under contract law, you are obligated to the terms of the contract. Therefore, typically if you do not fulfill your obligations, you can be forced to do so in a court of law.
25/08 14:25:36
Suzan wrote:
Hi, my husband and I are trying to get out of a land contract on a condo in WI. If we do not fulfill our obligations and the seller forecloses, can she sell the condo for much less and come after us for the difference? If we than claim bankruptcy and the courts can prove that we can make the payments would we be granted a bankruptcy?
23/08 18:04:57
refadmin wrote:
Dear Jill:
Yes, it does. Furthermore, you are now a creditor and are automatically stayed or prevented by law from collecting against the debtor. It gets pretty dicey for you. You need to file a motion to lift the automatic stay and proceed from there.
Yes, it does. Furthermore, you are now a creditor and are automatically stayed or prevented by law from collecting against the debtor. It gets pretty dicey for you. You need to file a motion to lift the automatic stay and proceed from there.
13/07 20:52:43
Jill wrote:
My husband and I sold a house on contract. The buyer stopped paying three months ago and now has filed for bankruptcy, and listed us in it. Does that mean he will not have to pay those payments?
13/07 20:34:00
sasha wrote:
I am a music store listed as a Class i Executory Contract with $57/monthly. This is for a rent to own contract on a band instrument. Can I not just ask for my instrument back. If not, is there something I need to do to make sure I get paid the $57 monthly. Is that being guaranteed? Or do I need to file some sort of "motion" or "proof of claim"?
06/01 14:05:11
Jennifer wrote:
I am leasing a apartment in Louisiana I am currently in a bankruptcy can I add my lease to avoid being evicted?
21/11 00:45:02
refadmin wrote:
Dear James:
I would worry that the bankruptcy trustee could call that a fraudulent transfer on the basis that you are transferring an asset to avoid it becoming a part of the bankruptcy estate. I would also worry about criminal liability. If you have an attorney, you should trust him to advise you correctly or retain an attorney whom you trust.
I would worry that the bankruptcy trustee could call that a fraudulent transfer on the basis that you are transferring an asset to avoid it becoming a part of the bankruptcy estate. I would also worry about criminal liability. If you have an attorney, you should trust him to advise you correctly or retain an attorney whom you trust.
06/11 12:42:33
james wrote:
me and my wife are having financial hardships, she has a lot of credit cards we need to get rid of but, we own some property in mi and the lawer says we can not file for chapter 7 unless we sell it. can we do a land contract on the property to a freind and then if he no longer wants it assume the property back?say in a few years.
06/11 11:07:24
refadmin wrote:
Dear Jimmy in Indiana:
All debts listed on your bankruptcy petition which you do not reaffirm (recommit to in writing) are discharged forever. This means that if you list the land contract on the petition, all remaining legal obligation on that contract will be forever discharged.
All debts listed on your bankruptcy petition which you do not reaffirm (recommit to in writing) are discharged forever. This means that if you list the land contract on the petition, all remaining legal obligation on that contract will be forever discharged.
03/08 13:05:13
refadmin wrote:
Dear Ms. Mahoney:
The bank will have a higher priority than the wife if she was given the house after the husband gave the note to the bank. If husband files for bankruptcy, negotiations will have to be made with the bank and with the trustee. The trustee has the power to avoid transfers of assets. In the end, the husband may be able to reaffirm the debt or the wife may be given the option to get a loan to buy the house or assume the mortgage.
The bank will have a higher priority than the wife if she was given the house after the husband gave the note to the bank. If husband files for bankruptcy, negotiations will have to be made with the bank and with the trustee. The trustee has the power to avoid transfers of assets. In the end, the husband may be able to reaffirm the debt or the wife may be given the option to get a loan to buy the house or assume the mortgage.
03/08 13:02:43
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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.