Need advice seller going through bankruptcy

[Milton F.]

Hi BP, I need your advice. I just received a call from a seller that is currently going through bankruptcy. She said her home is no longer in foreclosure due to filing for bankruptcy. She said 140k is owed on the home. She would like to make 10k off sell (150k). She said the home doesn't need any repairs. According to comps home is valued at 170k. My question how would go about handling this situation? Would you do a lease purchase? A sandwich lease option?

[Paul Choate]

Bankruptcy does not stop foreclosures without resolving the underlying default. It delays them or cures the default though a chapter 13 plan. If she is in a chapter 7, the stay will expire in about 3 months (to be safe). The bank can then resume the foreclosure or they can file a motion to start sooner. You can negotiate a sell with the bank but you can not rely on the old note if she is in default. If she is in a chapter 13, she needs the Court's permission to do just about anything. I don't know of a Court that would approve any creative financing options for a debtor in a chapter 13 bankruptcy.

This should be a cash sale or you are wasting your time.