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Updated about 9 years ago,
Tricky Question about Bankruptcy Discharge on Property
Hello Everyone!
I am seeking some advice from the collective knowledge of BiggerPockets!
Here's the situation. I found a commercial property that I want. Amazing deal. I spoke to the owner directly today. He used this property for his business, which he filed for Bankruptcy on in 2006. Since that time, ownership has not changed from his name to the bank's or anyone else's. He wasn't aware that the property still belonged to him until he received a tax bill this spring, which included all of the taxes since 2006.
Here's my question. He had a title search done. No claims from the bank. If I was to buy this property and had a title search done with insurance, and there was nothing relating to a bank claim on the exception sheet, would I own the property free and clear? The situation to me seems to be that the bank discharged the debt in bankruptcy court, didn't foreclose on him, and allowed him to keep the property. Obviously, if there was nothing filed to take the property, there may not be a release of the original mortgage either.
Please let me know what you all may think of this. Thanks in advance.