Legal Question in Bankruptcy in New York

Previous owner chap7 can trustee take our home?

we assumed a morgage from a friend of mine who moved to FL. because finiancial and work difficulties here in ny. His wife filed ch7 as soon as the assumption was completed.

we did not pay them anything above cost for the transfer. they where in the house for 4.5yrs with a VA loan(no equity to speak of)and we used my VA eligablity for our loan. They have recieved notice that the trustee intends to sell our home. what can we do. Please someone help us. We hid nothing and had no idea this could happen. we moved in nov/02 and closed may/03.


Asked on 10/06/03, 9:50 pm

1 Answer from Attorneys
Andrew Nitzberg Andrew Nitzberg & Associates

Re: Previous owner chap7 can trustee take our home?

Ok - it sounds awful, but is not as bad as it sounds. You must contest the referee's action and do it quickly. There are time limits.

What the referee is doing is proper, but he may not know all of the facts. For example, if your friend used the house as his home he may have been entitled to a "homestead exemption" for CH7 and not required to give it up. You would have 'rented' from him, and then bought the home after the CH7.

There are still things that can be done - You are welcome to a consultation for no fee at my offices at 42 West 44th Street, New York, NY. Please call for an appointment first � (646) 591-5786.

The referee must be made aware of the 'equity' of your friend at the time of transfer. Since the sale price at foreclosure will be less than the market price, the bank will take almost all of the money for the mortgage. The referee will recoup zero dollars for the bankruptcy estate and the creditors.

So your position is not that bad. I am available to help you work this out. (718) 729-2029 or 646-591-5786.

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Answered on 10/07/03, 12:55 pm


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