Buying from a person in Bankruptcy - Chapter 7

[Natasha Woods]

Hello,

I hope to purchase an investment property that the owner is going through Chapter 7 bankruptcy. I contacted the trustee, the mortgage company, and have been told I need to work directly with the owner, as the person still has possession of the home. What are the appropriate next steps?

Thank you,

Natasha

[Christopher Phillips]

@Natasha Woods

only the owner would know. You'll have to speak to the owner about their situation. Considering it's chapter 7, my first guess is that they owe more than the house is worth. If that's the situation, the lender will have to approve the sale and they will want an agent to list the house and handle the shortsale process.

If it does have equity, you will have to work up a deal with the owner and the owner will need to get permission from the bankruptcy trustee to conduct the sale.