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Documents needed for a Chapter 7 deal

 

Question: What do I need from the Bankruptcy Court in order to close a deal when the house is in a Chapter 7?

Answer: One of three documents should be sufficient for your attorney to do a legal and proper closing.

(1) a Notice of Dismissal of the Chapter 7 or

(2) a Notice of Discharge of the Chapter 7 or

(3) a Notice of Abandonment from the Chapter 7 Bankruptcy Trustee.

The Notices of Dismissal and Discharge indicate that the bankruptcy case has ended and therefore, the Seller can sell the property. The Notice of Abandonment indicates the Trustee has no interest in the property and that, therefore, the Seller is free to sell it.

Success Story, from a subscriber

Hello Caryn, Mark. I just "got the deed" and a contract to purchase a Post-Bankruptcy Report property with plenty of equity! ARV on the property is $135,000, rehab figures are $7500 on a retail sale and only about $2500 if I keep it for rental. The first mortgage balance is $72,000 and the second mortgage (HELOC) has already issued a charge-off. All I have to do is get written notice of that charge-off and I'm good to close. THANKS!

An Excited Subscriber, Atlanta, GA

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