real estate contract
I am selling my mobile home for 5,000 and the buyers were going to purchase it,, but now they say they might file bankruptsy,, can that hold them from buying the home on contract?
1 Answer from Attorneys
Re: real estate contract
If you get the sale completed BEFORE they file bankruptcy and it is an "arm's length sale," you might be ok.
HOWEVER, it's a pretty big "might," because there are also rules in bankruptcy that allow a trustee to rescind a sale made within a certain time of the filing.
So, whether you will be forced to give the money back to the estate is a question that cannot be answered until it happens. For $5,000, it might not be worth it.
The problem is that the creditors are going to want to maximize the amount of money they have to divide amongst themselves. There's no good way to justify buying a MH from you just before filing bankruptcy and essentially telling around and telling the other creditors "I've no money to pay you, --I just bought a MH."
Finally, the trustee in bankruptcy can approve the sale even after they've filed, so maybe they can consult counsel and find out how to manage it. I coul see an argument for it, if they are doing it as a way to CONSERVE money for creditors (e.g. it's cheaper than paying rent elsewhere), rather than deprive creditors of money.