Will a court enforcea contract of sale with seller who is in bankruptcy?

Get Legal Help Today

secured lock Secured with SHA-256 Encryption

Will a court enforcea contract of sale with seller who is in bankruptcy?

I am buying a house (not foreclosure or short sale). We signed all closing documents and at the last minute, seller refused to close saying she disagreed with the payoff amount and would now owe money to the mortgage company. Seller is in Chapter 13 bankruptcy and the bankruptcy court already approved the sale price and selling of the house. We have a court date to force the sale since she is in breach of contract- will the court force her to comply with the contract or is there some protection given to her since she is in bankruptcy?

Asked on November 12, 2010 under Bankruptcy Law, New Jersey

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The reason she is upset is because a Chapter 13 does not wipe out debt, it only restructures it.  The seller was foolish in not checking the numbers before hand.  She has a deficiency and the mortgage company can go after her for that money.  If the debt is not listed on the Chapter 13 bankruptcy (and from what I can tell from your question it appears that it may not be) then it may be possible for her to add it, but she may then not be able to repay it.  The protections she is afforded are for those debts listed. The suit that you are bringing is known as "specific performance" of a contract.  It is generally used in house sales as real property is considered "unique" and therefore monetary compensation can not make the buyer "whole." Maybe she can negotiate the deficiency.  That should be suggested. Good luck.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption