7 discharge in 2001 Now being sued

[abballmom]

In 2001 we filed chapter 7 and it was discharged. My husband owned a homebuilding business which went under as well during this time. All co debts as well as all personal were included in the bk. Our home that we built was included in the bk and went into forclosure and from what little we know remained empty for at least two years. We loved our home and never had the problems that are now being claimed.

All has been well, then yesterday my husband was served with papers on a lawsuit filed by the new homeowners. Actually the now defunct (not been in business for 4 years) corporation was named as well as the county inspector who inspected the construction of the property. They are claiming gross negligence in the construction to the tune over over $200,000. Yikes!!!

Do we have anything to worry about? We received a registered letter notifying us of problems and I immediately responded and notified the attorney this house was part of a chapter 7 and then we received the summons--they hadn't received my letter yet so the lawsuit had already been filed. Can someone be sued over something that was discharged over 4 years ago?

[JeepMom]

You were the owners and builders of the home?

If you were the builder and this is a new home construction then yes they could unless you were in incorporated. If you were incorporated and the company was disolved I don't see how they could. I would suggest spending a couple of bucks on a great lawyer.

[anonymuse]

If the house was the property of the estate, then it became the property of the trustee. Why can't it be their responsibility? Did the prospective buyers/now owners get an inspection before buying the house?

Like JM said, time for a great lawyer.

[no_it_all]

Your bankruptcy (or anyone's bankruptcy) does not exempt them from being sued in Civil Law..Which is what is happening to you. Bankruptcy has domain over creditors and debtors, and that is all. Your husband was/is a General Contractor and built a house that the Plaintiff believes to be sub-standard. They are suing you and the inspector and probably anyone else they can.

Your previous bankruptcy discharged <debts> only. At this point, you do not need to see a bankruptcy lawyer, but should seek counsel with one versed in Civil Law and Procedure. Whatever you do, make sure you respond to the suit in a timely manner so a summary judgement isn't entered for the Plaintiff.

[Minnymouth]

I also believe this falls under Civil Law.........................

How was the home handled................... sold by you? sold by the Trustee?
Was it sold "AS IS" at a auction.?????

A lot of this info will make a difference on the turnout.......of the law suit......

[BassBoy]

$200,000?!?!?!?! FOR WHAT?!?!?!?!?!

Can you give us some more info? What are they claiming to be wrong? Did the builder (your husband's co.) follow the building codes without taking any short-cuts? What?

[BassBoy]

Here's a little something I found about a court case, in Ohio though........



Looking at this precedent, I would believe that the purchaser should hunting down the the holder of the note before the sale, but this depends on what exactly is wrong with the property. However, I would care less what it was. If the bank or sheriff had sole possession, then it shall be their responsibility to have the property thoroughly inspected inside and out AND disclose whatever may be wrong or in dire need of repairs......just like when you buy a house from a seller.

Just my 2 cents......

[abballmom]

Sorry to take so long to respond

Thanks for all the responses.

Business was a sub s corp and no longer in business fot at least 4 years. The corp is being sued, not builder personally. We lived in the house for 2 years. It was our dream home-- and we had none of the problems they are claiming such as: not properly supported by squash blocks (they were in fact installed per code), walls structurally unsound and logs not properly installed,electrical system inoperable (everything fine when we lived there),heat system not installed to code,plumbing system inoperable (worked fine for us-no problems..is on septic) etc. The actual cost in damages they are seeking is well over $380,000.

The house was forclosed on and went up for auction. No takers and the bank retained it, I believe. Remained empty for a couple of years totally open to the elements as well as squatters (was in a very rural area on acreage). Was finally sold by the bank I believe but am not sure. We have not been back since we left because it was and is too painful. Was sold for at leat $200,000 less than the mortgage we were paying. I found this out by doing a real estate search on it.

We did everything to code and loved the home. The other people on the suit is the state building inspector. I would think the bank would have been on the lawsuit as well except that the house most likely was sold "AS IS".

I have alrady faxed everything to the attorney who did the bk but I'm worried.

[BassBoy]

Let me see if I understand one part of your post.........the bank retained it after no takers at auction and THEN it sat empty for 2 years? Is that right? I would tend to believe that the once the house was in the lender's possession that it should be the banks problem. Once they retained the title, it should have been up to the bank to keep the property maintained, perform repairs and have insurance for it.

The buyer should be going after the bank for whatever is not working or has gone "bad". As for they poor craftsmanship they are claiming, was there a certified inspector/contractor that was able to prove that is was poor craftsmanship? Either way, if there were problems that arised when the lender took possession, and was not to your knowledge, than I believe the sole responsibility should be on the lender's head and on their dime, or at the very least, the appraiser (if there was an appraisal) who perormed the inspection. Of course, this is just my opinion.

Ask as many questions as you can and make the lender or appraiser provide affidavits of truth that the home was completely inspected and any problems disclosed.

Hopefully, you'll be able to acquire an attorney (if your BK attorney is not versed in this area of law) to help you fight this one. I think you could walk away from this one.

[BassBoy]

.........How was the home handled................... sold by you? sold by the Trustee? Was it sold "AS IS" at a auction.?????

A lot of this info will make a difference on the turnout.......of the law suit......

If this is the case, then.............

Pursuant to a judgment of foreclosure by sale rendered by the Superior Court for the Judicial District of New Haven at New Haven in the case of ABC BANK v. JOHN DOE, Docket No. CV01-0123456, the property known as 125 Main Street, Anytown, CT is being sold at public auction on Saturday, [Date] at [Time]. The property is legally described as follows:

[Insert legal description of property].

There is some intro mumbo-jumbo and then,

Whether or not this means the purchaser can still come after you, I'm still looking into. I'll hammer away at this.

[BassBoy]

A littel tid-bit I read...........

Home buyers often have the misconception that foreclosures come dirt cheap. This view is so prevalent, the U.S. Department of Housing and Urban Development, one of the country's largest providers of foreclosed homes, finds it necessary to inform bargain hunters that no, they won't be able to find a HUD home priced at $1.

And buyers purchasing foreclosed homes often find themselves stuck with a property in need of serious repairs. Unlike traditional home purchases, there is no requirement that the sellers of foreclosed homes disclose all the problems with them. And once buyers find these problems, as they so often do, it's their responsibility to fix them, no matter how expensive or serious.

For this reason, buyers who purchase a foreclosed home without employing professional home inspectors are asking for trouble. And those who ignore their inspectors' advice and buy a "bargain" anyway? They deserve what they get.

Okay, so my opinion of it being up to the lender/appraiser to disclose problems was a bad opinion.

[Minnymouth]

If the home was sold "as-is" at a auction, THEN "buyer beware" because you get what you pay for.....................

Auction Sale does not require an appraisal or disclosure of conditions of home......
IT IS SOLD AS IS - OFTEN SIGHT UNSEEN....... on the courthouse steps.....
Many places are sold and people have never seen the inside of them......
There are no "warranties", "list of repairs needed", etc........
Strictly "AS-IS"....................

Also, I don't see how someone can sue you over the home since you no longer have possession of it and haven't had for quite some time.......
It is the responsibility of the Trustee or whoever owns the deed to the property to maintain it, insurance it, etc....... This is who the new buyer needs to confront.

[BassBoy]

anks Minny,
After doing a few google searches about buying a foreclosed home, I realized that my opinions to nail the appraiser or lender for non-disclosure of repairs and/or damages was a wrong opinion.

Nevertheless, I agree that it is the resposibility of whomever had possession of the deed.

[Bobby'sGirl]

Wondering...

...if they (now defunct s-corp) built house for themselves or as a spec house. Surely there must be a record of inspection for code upon completion before occupation somewhere in city/county offices. If so, then that should prove what you are stating about condition as built by builder (your defunct company) could be verified. Good luck on this one. They may be on a fishing expedition to see who bites at a settlement rather than go through the expenses of defending a lawsuit.

[abballmom]

Thanks for allitional responses

The house received full inspections in every phase of building and was signed off. Certificate of occupancy was obtained.

The house was not sold at auction and was the property of the bank until it was sold and it took quite a while. It was out in the sticks so I doubt the bank maintained it. We never signed any disclosures whatsoever as to the condition of the home. Even if we had we would have stated that all was in fine working order.

The law firm who's sueing us is a big firm w/big guns.

I spoke to the attorney who did the bk and he said to write a letter to the attorney filing the lawsuit stating that the corp has no assets and has not been in business for several years and there is no need to answer to the lawsuit. I just want to be assured we won't get in trouble by them going after us personally if we don't file a formal motion or answer to the lawsuit w/in the 30 day period.

It's insane!! We never had a problem with the house. Who knows what happened in the four-five years since we lived there. It was in the forest with all the wildlife that comes with it. Mice eat through wires and create havoc when a home is vacant. The elements are brutal at times and logs need to be maintained.The septic needs to be maintained or there are big problems as a result. A million things could have happened in the time it sat vacant and uncared for--none of which were a result of shoddy workmanship. The ground cound have moved due to a minor earthquake. WHO KNOWS!!! All I know is that we will be devastated again financially if they don't cut us loose (It's really only my husband's defunct corp but in actuality it's "us".