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
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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.