Last minute financial windfall...now what??

[ethrjock]

I am 2 days after my 341 meeting, just received my letter of relief from stay from the mortgage company (we are not keeping our home)

Today I got a call from a realtor that I was under contract to sell my home with last year. She never sold it but today she got a call from a comercial land owner that wants to buy my property. She said she can present a contract to me next Tuesday. The offer is enough to cover both the first and second mortgage. She wants me to sign a contract with her that allows her to show my property since we are not under a contract to sell with her.

Its possible that if the commerical owner really wants my home the offer could come in high enough to not only cover my mortgages but might be enough to pay all my other chap 7 debts too.

Is it possible to stop the chap 7 process after my 341 considering my sitation.

Important dates: Jan 23 2007: Date set for the motion of relief from stay meeting: Jan 3rd. 341 meeting. Filed Dec 3rd, 06.


This could be a really good thing for us and I can hardly beleive this is happening in the final days of my Chap 7 process. HELP!!!! Our emotions are all over the place.

[Princesskina]

Hmmm unique situation can't wait to see what a vet has to say...

I believe it's possible to file a motion or something on that line stopping the BK but I am unsure.

Congrats if indeed everything works in ur favor.

[ethrjock]

I aint counting my chickens just yet but this has got our hopes up a bit.

[SinkingFast]

Well,............. I'll tell you what happened to us.

We went into Foreclosure. Our Realtor knew but refused to pull the listing. She said "You never know what will happen." And, Lo and Behold! She was right. A week before the Auction was scheduled, an offer came in.

We were able to pull a deal together, get our house sold, and dodge having Foreclosure listed on our Credit. A good thing, I thought at the time.

Later, a mortgage Broker posts here, in the Credit Rebuilding Section, that when prospective mortgage Lenders in the future see the 150-180 days late,........ They'll assume a Foreclosure occurred anyway. Thank You Very Much!!

Don't get me wrong. I'm glad the Lender got paid. The Realtors got paid, and all. But to learn afterward that we didn't, at the very least, earn some Brownie points out of the deal was very frustrating.

Does the Realtor know your house is slated for Foreclosure??!! I think I'd start there and see how that conversation goes.

As far as BK and your Credit Reports,.......... BK is already there. And it will stay there, unless or until it expires or you manage to have it removed somehow. That's 10 years for Ch 7, whether you're actually discharged or not. And unless you're willing to plug away like the devil himself, you'd probably have to hire a firm like Lexington Law to get the BK removed from your Credit Reports.

I'm not saying "Don't give it the old college try." I just want you to have an idea of the quagmire you'd be wading into before you ever start.

[ethrjock]

No the agent does not know. I felt if she did what would stop her or her firm buying it at the sheriff sale, reselling it to the commercial land owner. I would get the shaft then.

What was the point of no return?? The 341 meeting or the day I signed papers.

Would'nt this just suck the big one. Finnally find that buyer we had been looking for that would of kept us out of BK but low and behold he shows up too late.

Well I could try to negotiate with the buyer and see if there is money to be made from the sale.

Let's say I owe $254k on the home and $25k on other discharable debts. If a offer comes in for $350 after commisions i could pocket $70k and all my creditors will be paid in full...but I would still have the BK on my report???

That would bite!! but it would help the medicine go down a lot easier with the extra cash for the fresh start.

I guess I will just have to keep her in the dark for now regarding the BK with the sales agent and see if I get a high offer. I will also call my atty and make sure doing this is on the up and up.

Does anyone on this board know? My atty wont be availiable until Monday and not knowing is killing me.

Thanks!1

[HHM]

This is a difficult situation, because it can be difficult to dismiss a chapter 7, especially if the reason is you are going to get money. You need to understand, the BK trustee is now in-charge of your assets, you cannot do anything. The point of no return was the date you filed BK. If the trustee is willing to let you out, you can get out. But otherwise, it is very hard to dismiss a chapter 7.

Also, you don't owe this real estate agent anything, any contract you had with her has long expired (which is why they need you to sign a new one). This is probably a long shot deal and your agent is just looking for a way to get a commission. I say it's a long shot, because it is fairly odd to have a commercial buyer interested in residential property because re-zoning is a big hassle and any sale will be contingent on a successful re-zoning hearing before the county commission. Unless you mean by commercial buyer, a real estate developer, but even then, they are generally interested in multiple tracks of land and will make any deal contingent on acquiring adjacent parcels.

I am not trying to dash your hopes, but I think you sprinkle of reality is probably in order.

[aa06a47]

Technically speaking, you no longer have the right to sell the property as it is part of the bk estate. Talk to your attorney.

[BK'd-Betty]

aa is correct - if there is that much equity in the house, I'm surprised the Trustee isn't seizing the property for sale to pay off your creditors.

As far as the BK on your credit report - yes, even if you sold your home now and paid every one off - the BK will still be on your report for 10 years. (unless you can get it removed, I got mine off TU & my foreclosure too, but no love from EX, EQ). Further, if you do get the Trustee to dismiss your case, your credit report will reflect a DISMISSED Chapter 7 - and it won't show that you requested it be dismissed - it will just say dismissed - another black mark on the report.

It's quite a pickle, but I'm sure it will all work out for you. Just forget about the credit reporting for now and concentrate on the sale - credit repair can be done later, down the road. You'd be amazed at the things you can do to repair your credit.

Technically speaking, you no longer have the right to sell the property as it is part of the bk estate. Talk to your attorney.

[poorme]

Last poster is right - your 'asset' belongs to the trustee at this point - however, your attny can help you present this to the trustee and work with the mortgage co to allow the sale. The unfortunate part is that you only get what is left over, because any profit also belongs to the estate at least until the bills are paid and estate is closed. It has been seen before that some trustees have found a way to 'whittle' away at that leaving you with a paltry sum at best. But the bright side is your debts will be cleared and you have no foreclosure on your credit reports. I wouldn't advise the realtor until you have a firm offer/contract in hand.

[ethrjock]

Thank you all for your advice so far:

To clear one detail up. I have 2.5 acres and next door there are 30 acres zoned commercial. Its been for sale for a year or so. The agent listing the 30 commercial acres (lets call him agent1) contacted my old agent (agent2) asking if I was still interested in selling. I have to assume that agent1 has a potential buyer and they are interested in my land too. You see my land is currrently residential but the 20 year land use it is zoned commercial. Also, there has been a lot of road construction on in front of the 30 acres and they are about finished. They are on a corner of a major highway and my road. My bets is that my land will give them additional road frontage (400ft) and a buffer since to my left is a subdivision and they are to my right.

Also, my wife kept the orginal listing and the agent listed it for 389K as potential commercial property. SHe contacted other commercial owners in the area to try to sell it to them but the area has changed and is almost ready to explode with commercial developments. She never sold it and that too was a long shot since we had tried to sell it as residential several time for $260 and never got a bite. $260 was what we got for the last appraisal so that is what we told the trustee it was worth...I never expected to see a offer for a sale from this agent so I am not trying to be dishonest with anyone. It's just not worth it.


Long post I know but just tying to educate the experienced members as to my unique situation.

Thanks ALL!!


I agree that it's a long shot too but at this point I have nothing to loose. This gives me a good reason to go to the relief from stay meeting and get an extension to see this thru. This may keep us in the home a bit longer too which isn't a bad thing either.

[aa06a47]

Would you get to keep the land in the Chapter 7?

[ethrjock]

No. I am not keeping the land/home (one in the same). I can't afford to. I am surrendering the home in the Chap 7.

[HHM]

Thank you for the clarification, the more we know, the less we have to speculate

The main problem is that you already filed chapter 7, and that just makes things complicated. Just to make sure I understand, you reside on the land in question (based on your first post, that would seem to be yes, correct)?

If this person is interested in buying the land, do you think they would still be interested in a few months. The best course of action would be to ride out your BK, get your debt discharged, THEN sell the house. After all, home equity is exempt, so it would not be considered a post BK windfall that would need to be turned over to the trustee, plus, sale of a home, is a "normal course" transaction. Why dismiss your BK and use the proceeds to pay the debt when you can discharge your debt, and pocket all the proceeds.

EDIT
You wrote a post as I was writing...I forgot that you were in foreclosure and there was a Motion to Lift Stay that has been, or will be granted so they can continue with foreclosure.
Thus, disregard what I said above. You may need to approach the trustee and make a deal. i.e. to see if you can close the deal on the house, you keep the exempt equity, and the trustee gets the rest to pay off your chapter 7.

[ethrjock]

Update: Spoke to my Atty and he said I could not make any deals with the real estate agent. Any deals would have to be made with the trustee and the agent. He said I have no right to and for all pratical purposes the home is not mine. It really sounded like he was blowing me off.

He also said the trustee would not be interested since the sale would not benefit the unsecured creditors unless the selling price exceededed the payoff for both the 1st and second plus my $10,000 state exemption.

He told me to give the agent the trustee's phone number. I told him if I did that then the agent would then know I was in BK and she would probably withdraw and buy herself later selling it to the commercial property owner next door for a big profit...He said that's not my problem anymore.

Does this sound legit...or is the atty just blowing me off so he does not have to spend anymore time on my case.

Do I have rights to negotiate a deal with the agent? I hate to blow away any potential sale that could result in some cash back to me plus paying off both the second and first thus avoiding a foreclosure.

What a roller coaster...If only this would have happened 3 months earlier.

[HHM]

Update: Spoke to my Atty and he said I could not make any deals with the real estate agent. Any deals would have to be made with the trustee and the agent. He said I have no right to and for all pratical purposes the home is not mine. It really sounded like he was blowing me off.

He also said the trustee would not be interested since the sale would not benefit the unsecured creditors unless the selling price exceededed the payoff for both the 1st and second plus my $10,000 state exemption.

He told me to give the agent the trustee's phone number. I told him if I did that then the agent would then know I was in BK and she would probably withdraw and buy herself later selling it to the commercial property owner next door for a big profit...He said that's not my problem anymore.

Does this sound legit...or is the atty just blowing me off so he does not have to spend anymore time on my case.

Do I have rights to negotiate a deal with the agent? I hate to blow away any potential sale that could result in some cash back to me plus paying off both the second and first thus avoiding a foreclosure.

What a roller coaster...If only this would have happened 3 months earlier.

That sounds about right and that is what we have been saying...since you in chapter 7, you no longer have legal control your assets, the trustee does. Your assets are part of your Bankruptcy Estate which is controlled by the trustee until your case is discharged, or otherwise dismissed.

Did you happen to ask your attorney about dismissing the case?