What happens if you own investment property and you declare bankruptcy?

Question

What happens to the lean holders on the property? How do they get paid there debt?

FYI - I am the lean holder in this situation. Not the person declaring bankruptcy. I want to know if I am still going to get paid if the homeowner declares bankruptcy.

Answer 1

If you have a properly secured in, then you will be one of the first in line to get paid if the property is sold. The bankruptcy will resolve the personal obligation to pay the debt, but it will not eliminate your lien.

If the property has a lot of equity, the trustee may sell it and you'll get paid from the proceeds. If the trustee won't sell and the owner intends to keep it, the owner must continue to pay you. Otherwise, you can file a motion for relief from.

I would a local attorney who represents creditors in bankruptcy cases

Answer 2

You get to keep one house and one vehicle. Other property that you hold for investment is returned to the seller. The attornies will work how much money you must pay. They will set up an installment plan that you must follow in order to get the bankruptcy discharged. (discharged meaning that you are no longer currently in bankruptcy) Some debts will disappear completely, others like child support and taxes will not go away.

Answer 3

Your lien holders will be lined up when the property is foreclosed on by your lender, to pick through the scraps after the property is liquidated. First in First Out is the way they will be paid.

Answer 4

the smart thing to do is to sign them away so that they dont collect of that property. Whats going to happen is tha bank is going to give ur partners money back on what the property " with the way property taxes are going it wont be a hole lot."

Answer 5

Bye bye property for you and no they don't get paid.