Purchasing a home with cash after Bankruptcy

[derision]

I am hoping someone here can give me some incite that will help me. Earlier this year I filed for Chapter 7 BK. It was finally discharged in August I believe. After the discharge was complete I was contacted by a company that wanted to purchase one of my businesses. After a few months of negotiations we came to an agreement and the purchase was made in a sum of over 100k. Now I would like to use that money to reinvest into "home flipping". I plan to buy a house at a foreclosure auction. Now I called my attorney to make sure the purchase of a home would be ok. They informed me that I had to way two years before I could buy a home. Now im not sure if they just did not understand that this would be purchased as an investment property or not. I really dont trust the attorney that I used because they really didnt give me good service to begin with. Anyways my question is would it be ok for me to reinvest the money from the sale of my business into a new business such as this property?

[LadyInTheRed]

Welcome to the board, derision!

Is it possible your attorney thought you were going to try to get a loan to make the purchase? 2 years is the earliest you can get a mortgage after bankruptcy. If you are buying it for cash, I know of nothing that would prevent that. But, that doesn't mean there isn't something. I'd ask your attorney what law prevents you from buying real estate for 2 years after discharge.

[AngelinaCatHub]

I understand the circumstances. However, this is VERY soon after a liquidation in C7. It may cause a bit of a problem if found out by the Trustee. He could reopen the case with fraud in mind. If it were me, I'd lay low for some time. Buy the home on contract for deed. I just have a gut feeling about doing this cash transaction so soon. 'Hub

[despritfreya]

Hub is on target but I think the bigger questions are

1. Did you list the business as an asset on Schedule B?
2. Did the Trustee investigate the value of the business?
3. Has your case been "closed"? A Discharge does not close the case.

As Hub alludes to. . . even if the case has been closed, if the business has that kind of value I would think the Trustee would be interested. You really need to sit down with your bk attny or some other bk attny to look at the ramifications.

Des.

[derision]

Hub is on target but I think the bigger questions are

1. Did you list the business as an asset on Schedule B?
2. Did the Trustee investigate the value of the business?
3. Has your case been "closed"? A Discharge does not close the case.

As Hub alludes to. . . even if the case has been closed, if the business has that kind of value I would think the Trustee would be interested. You really need to sit down with your bk attny or some other bk attny to look at the ramifications.

Des.

thank you for the reply,

1. No the business was not included as it was never an asset until someone want to buy it. Basically what was purchased was a domain name.
2. No
3. Im not sure about being closed. I do have a letter that says Discharge of debtor but was unaware of the difference.

[despritfreya]

1. No the business was not included as it was never an asset until someone want to buy it. Basically what was purchased was a domain name. 2. No 3. Im not sure about being closed. I do have a letter that says Discharge of debtor but was unaware of the difference.

This is why bkforum is one of the most useful tools on the Net. By you posting on this forum our collective group can lead you down a different path than what you were going to take.

I will assume that the business is an entity (LLC or Inc.), although such is not critical. I will further assume that the business owns the domain name - again, if the name is owned by you, such is not critical.

What is critical is that it appears you never listed the business and/or the domain name on Schedule B. As a result, even if your case has been closed, you DO NOT own the asset and cannot sell it at any price.

Tomorrow you need to sit down with your attorney and go over this huge problem. This asset belongs to the bk estate and the ability to sell it (for any price) belongs to your Trustee. What ever you do, DO NOT sign anything until you sit down with competent counsel and figure out what your next move is.

Des.

[derision]

Is there a website I can go to and check to see if a case is closed or is that information my lawyer would have to pull up?

[despritfreya]

Is there a website I can go to and check to see if a case is closed or is that information my lawyer would have to pull up?

You would have to sign up for PACER

http://pacer.psc.uscourts.gov.

Or just ask your attny in the morning.

But, remember, the closing is not going to help you if the asset was never listed.

Des.

[derision]

I understand,

thanks for the help

[mountanddo]

Sounds like he already got the 100k.

[despritfreya]

Sounds like he already got the 100k.

Yup, sure does. Missed that. Funds belong to the Trustee and, while it sounds like fair consideration, the Trustee could demand more or set aside the sale and look for other offers. My heart goes out to the OP. Hope he is able to make things work for him.

Des.

[derision]

mount,

Sorry I was actually speaking hypothetically. No transaction has been made as of yet. Sorry to allude you on this. Thanks for the info as it helped quite a bit.

[mountanddo]

After a few months of negotiations we came to an agreement and the purchase was made in a sum of over 100k.

This doesn't sound like someone posing a hypothetical sale. I don't think anyone here is going to turn you in and I think your trustee is too busy to check names on a BK forum against IP addresses so I'd say you were safe, at least discussing your dilema. While no one here will support helping you keep money fraudulently there might be someone on the board who could help you find a legal way out of this.

[HHM]

Failed to disclose a business, testified at the 341 one that all assets were disclosed...hmm, big problem. I think the OP knew exactly what he was doing (probably didn't tell the attorney either) and is hoping he now won't be caught

For goodness sake, it is right there on Schedule B, line items 13 and 14
13. Stock and interests in incorporated
and unincorporated businesses.
Itemize.
14. Interests in partnerships or joint
ventures. Itemize.

What part of your "business" did you not understand would fall under either of those categories.

Let me put this in perspective, recently a debtor in Ohio (I think Ohio, the state escapes me) failed to disclose a parcel of land worth $70,000. The case was discharged, (but not closed, not that it would have mattered) and he is now on his way to federal prison for BK fraud and had his discharge revoked.

Purely hypothetical

After a few months of negotiations we came to an agreement and the purchase was made in a sum of over 100k.

that sounds awfully past tense to me.

Anyway, good luck. Practically speaking, you are probably going to be okay, but you will need to be looking over your shoulder for a few years.

[mountanddo]

Just to add, I don't think the fact that it would be purchased as investment property makes a difference. It's investment property for your gain same as purchasing a house for personal use.