I own a joint property and my partner filed for Chapter 7. Trying to buy his half

[MimiYung]

Sorry for posting again.. the content got deleted...

What is the name of your state (only U.S. law)? Bronx, NY

Greetings, I own a joint real property in the Bronx. My partner filed for consumer bankruptcy. A month before he filed the property missed its 3rd payment on the mortgage. In other words, foreclosure proceedings are about to happen. I called the trustee in an attempt to buy his half. The trustee said that unless I offer more than 25K the court will not approve it.

my question is:

1. Is that true or is he misleading me?
2. Should I come up with the 25K to buy the other half, do I need to go through a closing process and find a new mortgage or can I just get the other half and start negotiating with our current lender regarding paying back what is owed and getting the mortgage back on track?

Thanks!

 

[justalayman]

what would be accepted by the BK court is going to be based on the value of the property. You have not provided anything that would allow anybody to know the value of the property. I would expect the BK trustee to be looking for around 1/2 the total value of the property.

I am not clear on what is happening though. While you are a joint owner, unless your partner obtained a separate mortgage for his share of the purchase, you are also liable for the mortgage. Just as liable as your partner. If that is so, then you have also failed to make mortgage payments. The lender doesn't view the mortgage as 1/2 his and 1/2 yours. You are both equally liable for the entire mortgage debt.

Can you clarify as to the mortgage loan situation?

 

[MimiYung]

Hi,

Thanks for your response. I will clarify - regarding my mortgage liability - the mortgage note was never in my name. So I am not personally liable for the debt. My partner had this debt discharged. Just to clarify both of us own 50% of the property. On the deed we are tenants in common.

Regarding the value - the property is under water. Mortgage debt is 460k and it is currently appraised at 400k.

That is why I wanted to know if I offered for example 10k to the trustee, can he refuse it?

And also in case that he agrees will the court demand that I satisfy the original mortgage debt (that was discharged in bankruptcy) at the time of the deed transfer to me, or can I negotiate with the bank later.

Thanks

 

[bigun]

Regarding the value - the property is under water. Mortgage debt is 460k and it is currently appraised at 400k.


Good Lord! Why would you want to take over a property that's $60K underwater. Leave it alone. With that much negative equity, the trustee is just going to abandon it. After he does that, maybe you can work something out with the mortgage holder.

 

[justalayman]

.

My partner had this debt discharged.

has the BK been finalized and closed? If not, then the debt is not discharged yet.

That is why I wanted to know if I offered for example 10k to the trustee, can he refuse it?

absolutely yes. Why would the trustee consider selling their share of property for 1/40 of its actual value?

When you file BK on a mortgage, the bank has the right to take the property since the debt is being discharged. The BK court does not make them write off the debt AND give up their security interest. Often times the bank allows the debtor to continue to make payments like nothing has happened but they continue to have the right to foreclose on the property if the debtor fails to continue to make regular payments.

And also in case that he agrees will the court demand that I satisfy the original mortgage debt (that was discharged in bankruptcy) at the time of the deed transfer to me, or can I negotiate with the bank later.

until the BK is closed, the trustee has control of the situation. Once the BK is finalized, then you can negotiate with the bank without the oversight of the BK trustee.


I suspect you signed an acknowledgement that the banks rights supersede yours when the mortgage loan was taken out. If so, the bank does not have to deal with anybody. They can foreclose on the property and take possession if they so choose with you having no recourse.

Did you and your partner take ownership at the same time?