Land Contract, affect on by Sellers' filing Chapter 7

[Chipper]

ANYBODY been threatened with losing their land bought on a Land Contract, when the Sellers declared Bankruptcy just a few months short of the term of the contract? i.e. 6 months before the land was paid off, the sellers went into bankruptcy!! The Bankruptcy Trustee is threatening to seize the land and sell it to help satisfy the other creditors. . .
Please, if anyone has had a similar experience -- tell me what you did -- I'm not getting much help with this, since I live in New York State and the property is in S.C.
I have put over $24,000 into the land, septic tank and a storage building and they are threatening to take it away from me! At 77 years old, this is going to put me into poverty for the remainder of my life! I paid faithfully, and this is JUSTICE?
Any help via your knowledge of information you could share with me, will be very much appreciated!

(Chipper, it's not wise to include a private email address in a public internet forum, so I edited your post to remove it. -lrprn, a forum moderator)

[lrprn]

ANYBODY been threatened with losing their land bought on a Land Contract, when the Sellers declared Bankruptcy just a few months short of the term of the contract? i.e. 6 months before the land was paid off, the sellers went into bankruptcy!! The Bankruptcy Trustee is threatening to seize the land and sell it to help satisfy the other creditors. . .

I haven't had this experience myself, but it's obvious that you need expert legal help of your own immediately to find out where you stand regarding the seller's bankruptcy. Since he filed bankruptcy, that means his trustee now controls his finances and so controls your land's title although you have possession of the land. How much is this land worth if the trustee would sell it?

Most bankruptcy lawyers give free initial consultations, so contact 3-4 in your area of NY and also check www.martindale.com for 3-4 certified bankruptcy lawyers close to the property area in SC for a free phone consultation as soon as possible. Keep us posted on what you find out, ok?

[familyof7]

If that is the case you may have to submit a claim as a creditor with a security interest in that property if that is the case you would also get paid from the proceeds of the sale You definatly need to call an attorney. ASAP Because you are paying for property and have money in it so if you dont get the property you deserve your money back so technically you are a creditor with a secured claim. CALL AN ATTORNEY ASAP

[JRScott]

Yep do as the others said, you need a lawyer. I've not had this situation but it sounds complex and I"d get some expert legal advice.

[Minnymouth]

Yes, you need to have an attorney handle this for you ASAP....

Also was the land contract recorded????? If so you have a "mortgage" on the land until its paid for. That means you are a Creditor also against this man's assets.

Be prepared to produce receipts for all payments etc. on the land.....

It may take a while to get it settled, but hopefully it will be in your favor....

Keep us posted and let us know what the attorney says.

[alh]

It could vary some by how the land contract is written and state laws. You do need to see a lawyer to protect your interest.

A land contract does pass equitiable title to the buyer. The IRS sees the owner of a land contract as the "owner". The owner on record has legal title (in this case now the trustee). (it is a techical difference sort of like when you finance a car and the bank has the legal title until it is paid for, but they can't just come a take your car anytime they want as they don't have equitable title)

The big issue yo umay come up against is if the sellers are behind in their payments (if there is a mortgage on the property) That might need to be brought current by you (or possible refinanced by you, if possible) to pay off any liens.

In general, you should be fine, you just need to make sure your interest in the property is filed with the trustee.