Is someone still heldto a contract for deed if they file a Chapter 7 bankruptcy?

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Is someone still heldto a contract for deed if they file a Chapter 7 bankruptcy?

I have been selling a house to a couple on a contract for deed. They filed Chapter 7. I got a “Discharge of Debtor” notice from the US Bankruptcy Court stating that it appears the debtor is entitled to a discharge and is granted a discharge under section 727 of title 11. Does this mean they get out of their contract to me? Do they still have to honor the contract? If not, and they stop paying me, can I still enforce the contract?

Asked on August 1, 2011 Illinois

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You can enforce the contract and foreclose on them and take back the property. Or they can reaffirm the debt to you. The best approach at this point is if the contract is secured by the property itself, contact the trustee and see if you can move to exempt this from the automatic stay provisions in bankruptcy if the item is still pending and not fully completed. If the discharge has already occurred and the case is closed as per the trustee's indication to you, then you need to simply forclose and enforce your contract.


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