Wisconsin probate questions
A local family in my small rural Wisconsin town started a probate case for their father's property. The house is in poor condition and is worth about what is owed on the mortgage comma maybe a little bit more. Right now the estate hasn't been paying the mortgage and they are now about three months behind in mortgage payments. The family originally thought they could clean up the house and sell it for a small profit, but they realized that there was too much work and are contemplating letting it go back to the bank through foreclosure. In addition to the Mortgage Debt there is also about $10,000 in credit card debt.
I would like to buy the house from the family and fix it up. I would like to do this soon as each month the bank fees and overdue mortgage payments add to the overall balance which is due. My offer could be slightly higher than what is owed on the mortgage currently, but not a whole lot more as it would get too expensive for all the repairs that are needed . My first question is this... I've heard there's a way to sell the property before it goes all the way through probate. Is this true? And if so how does one do that?
In addition, the family would like to get a small amount of money out of the house to cover some expenses as well as all of their time spent cleaning out the house and doing some minor repairs. I would not mind paying the family a small amount over what is due on the mortgage, but my understanding is any amount over the mortgage amount would go to help pay off existing credit card debt. Is there any way to pay the family some money without having to pay off the credit card debt fully? If I paid the remaining mortgage balance plus the full amount of credit card debt plus some extra to the family, it just wouldn't make sense as the price would be too high. Any suggestions? Do credit card companies ever negotiate for a lesser price than what is owed? If the family decides to let the property go back to the bank through foreclosure the credit card companies would get nothing, right? So with this help make the credit card companies negotiate the debt since they will get zero if I don't buy it? What kind of a discount should the family ask for?
1 Answer from Attorneys
Any money paid into a formal probate estate would need to be used to pay creditors first; only after all debts and probate costs were paid, would the heirs receive any money. There might still be ways to accomplish what you want, but not via the probate process. Nobody could answer your questions, however, without seeing a title report on the house and examining the probate case file, if there is one. These days, many properties do not need to go through probate, if the decedent had the foresight to transfer it into a living trust or some form of joint tenancy before he died. The formal probate process, however, would likely rule out what you have in mind here, and is very cumbersome and expensive, so the odds of anything being left over are often slim for smaller estates.
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