I put a deposit on real estate property I was planning to purchase. The seller stated he was the executor if the estate which would e settled in 60 days est. and then we could close. He has never closed the estate and now I have heard he is filing bankruptcy and still has not settled the estate. I would like my money back per our agreement but he says his bankruptcy will absolve him of what he owes me. I feel it is the estate that owes me since my deposit was for the property of the estate, not for him. What are my options? I'm contemplating on placing a lien on the estate. What are my best chances of collecting? He has ha my money for 15 months. I am a resident of Indiana.
Your options depend on which chapter of bankruptcy he files.
You will have a priority claim in his bankruptcy case up to $2,600 for the deposit, which means IF assets are being distributed in a Chapter 7 case, you would get paid up to that amount before any junior creditors are paid. In a Chapter 13 or Chapter 11 case, you would likely get paid that amount.
Beyond the $2,600 you would have a general unsecured claim in his bankruptcy case and would share with any distributions made to that class.
If you have evidence that he committed fraud in getting you to place your deposit on the property, you can seek to have the discharge of your debt denied by timely filing a Complaint in the bankruptcy case and litigating that issue through trial.
Without knowing what assets he has or which bankruptcy chapter was filed, it's impossible to advise further. I suggest consulting with a bankruptcy attorney in the location where the bankruptcy case is filed for further assistance.
Mark Markus has been practicing exclusively bankruptcy law in California since 1991. He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization, AV-Rated by martindale.com, and A+ rated by the Better Business Bureau.
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