QUESTION
What happens to my rent to own home with $15,000 down payment if I file for Chapter 13?
Asked on Oct 13th, 2012 on Bankruptcy - Florida
More details to this question:
I am currently in a rent to own home where I put $15k that is to be used toward down payment of home. If not exercised the contract states I lose the money. I am currently one month behind on payment and currently looking to file chapter 13 what happens to the $15k that I put down?
9 ANSWERS
The whole point of filing a 13 is to save the home. You should have no problem with keeping the home (and your 15k) but I would contact a bankruptcy attorney and meet with him with a copy of the "rent to own" contract.
Answered on Oct 16th, 2012 at 7:58 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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In NJ it would be safe.
Answered on Oct 16th, 2012 at 7:45 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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Check the exemptions law of the state where you live. In Arizona this deposit would not be exempt. Talk to a good chapter 13 attorney in your state to determine your rights.
Answered on Oct 16th, 2012 at 7:40 PM
The bankruptcy will not affect your contract on the rent to own. The money is gone. The question is only do you want to maintain the contract and can you afford to retain the contract.
Answered on Oct 15th, 2012 at 3:36 PM
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Nothing happens to it. You don't own it yet. You simply note the amount you pay in rent. The $15,000 you put down is not refundable to you, so the trustee could not obtain it either. I would make sure that the $15,000 was paid more than 90 days prior to filing bankruptcy, however, in order to avoid any preference issues.
Answered on Oct 15th, 2012 at 3:34 PM
What you have is called a lease-option, or perhaps a contract of sale. You should be able to hang onto it even through a chapter 13, but there are traps. Depending upon where you are in the United States or even within a state, different local rules may apply. Bottom line: this is tricky and you really, really need a lawyer. It might be in your interest to catch up before you file. You also should analyze carefully whether keeping the house is really what is best for you. Cost is not value. Just because you paid $15,000 for something does not mean that it is worth $15,000. Again, an attorney can help you make a good decision.
Answered on Oct 15th, 2012 at 3:34 PM
Bankruptcy Attorney serving Myrtle Beach, SC
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Law Office of Margaret L. Evans, PC
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Depending on the wording of the contract, you should be able to catch up the arrearage (1 month behind) and continue to make the "lease payments" outside of the Chapter 13 plan. It will be important for you to bring that contract to the lawyer to review it to see if he or she can work with the owner to re-write the contract more favorably for you. Without reviewing the contract, I can't really give you any more advice.
Answered on Oct 15th, 2012 at 3:30 PM
Bankruptcy law allows a 20,200 exemption in real property. I recommend catching up on your home payments as you should be able to afford the house if other debts are either discharged or paid on a 36 month plan. The contract appears straight forward: you lose the $15k if you do not exercise.
Answered on Oct 15th, 2012 at 3:29 PM
Criminal Defense Attorney serving Deltona, FL
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R. Jason de Groot, P.A.
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Read the contract. It is probably forefieted if you file bankruptcy. On the other hand it may not affect the situation at all. You will have to pay attention to the things you sign from here on. You have to keep up the payments if you expect to buy the home.
Answered on Oct 15th, 2012 at 1:31 PM