QUESTION
Should I declare bankruptcy right away or wait until I am sued after I defaulted on a real estate contract?
Asked on Sep 10th, 2014 on Bankruptcy - South Carolina
More details to this question:
I had to default on a real estate contract for a purchase of a condo, however the buyer for my property defaulted on his contract thus hindering me from closing on my new property because I need the cash to buy the new one. I didn’t pay the 2nd deposit, actually put a stop payment on it for $25,000 because my buyer defaulted, and cannot afford to lose that money. I understand now I will be sued by the seller of the new place I was trying to buy and I cannot afford to lose $25,000 plus whatever more they will sue me for not closing and their attorney’s fees. This all happened today. I have no debts other than my current mortgage.
5 ANSWERS
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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There are too many variables to consider, such as your income, assets, other debts (if any). Timing is everything you can only file a chapter 7 once in 8 years. Get a consultation to discuss options.
Answered on Sep 15th, 2014 at 9:40 AM
You could file bankruptcy on this debt although the seller/creditor may challenge your discharge on the basis of fraud. If the seller can find another buyer right away, however, they may not bother to sue you.
Answered on Sep 12th, 2014 at 2:11 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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If you have $25,000 in cash, you're likely to lose that in the bankruptcy. Unless there is a reason that cash is exempt, the trustee will take it and pay your creditor. There are certainly reasons to file a bankruptcy before you're sued but you have a potentially complex situation and need to consult an attorney.
Answered on Sep 12th, 2014 at 2:10 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Engage and attorney. Your best bet is to reform the transactions in order to make them work. It is doubtful that a bankruptcy is your best remedy, or would even be helpful.
Answered on Sep 11th, 2014 at 9:21 AM
Bankruptcy Attorney serving Charleston, SC
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Davis Law Firm
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The threat to sue is just that, a threat. Wait until you actually receive the summons and complaint. The seller is required to mitigate damages and must try to find new buyer. The new buyer may pay more than you would have paid. You need to consult an attorney to understand your rights and liabilities. The contract may also limit damages to less than you think might be owed.
Answered on Sep 11th, 2014 at 9:18 AM