Question: Is the trustee's objection to home purchase prior to filing and walking away from under water mortgage on another reasonable? Question Detail: We were underwater and behind on a mortgage for a 1000 sq ft home. During the process of walking away, we were presented with the opportunity to purchase a 3000 sq ft home with a seller finance. Seller is close friend of family. Payments are nearly identical. Trustee is claiming bad faith in the home purchase. Payments are nearly identical by new home is 2.5 times cheaper per square foot and in an area with much higher resale value. Is the trustee's objection reasonable and why? *- YES, absolutely the trustee's objection is reasonable because: 1) you're not lowering your payment; 2) a close family friend may, under certain circumstances, be deemed an "insider"; and 3) its being treated as a "preference" most likely. The trustee's JOB is to avoid fraudulent transfers (undo them) and maximize the proceeds available to the pool of unsecured creditors.*
Answered on Oct 03rd, 2012 at 12:53 AM