It is possible to purchase real estate from a Bankruptcy Estate. The Debtor is not personally liable for any real estate debt if they receive a discharge. If there is equity in the real estate, it would be better to wait until after the Bankruptcy is discharged and closed before the sale, otherwise, if it is a short sale or for about what it is owed on the property you may be able to move forward. You cannot force the Debtor to sell, especially if they are worried, so it would be a good idea for both of you to get legal advice before proceeding further.

Answer Applies to: New Hampshire
Replied: 10/5/2011

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It depends on where the seller is in the bankruptcy process. If they have already filed, it is likely safe for you to purchase after doing your due diligence and ensuring the title is clear. The court may re-open their case to use the assets from the sale to satisfy the seller's creditors, but this is not a problem for you. There is some risk to you if you purchase before the seller has filed a petition. The seller should discuss this sale with the bankruptcy attorney in detail before any deal is made.

Answer Applies to: Massachusetts
Replied: 10/3/2011

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No. You must purchase the property through the bankruptcy trustee. Have the person that filed put you in contact with the Trustee or hire an attorney to negotiate this often treacherous path.

Answer Applies to: Oregon
Replied: 10/3/2011

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That depends on what type of property and of course what the price is.

Answer Applies to: New Jersey
Replied: 10/3/2011

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Well, that won't happen but if they just filed you better check with the trustee first. Are you thinking of assuming their loan? Better check for a "due on" clause and I would advise them not to "reaffirm" the debt (which is not required anyway). They should seek legal counsel.

Answer Applies to: California
Replied: 10/3/2011

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They likely lack the authority to sell to you, so you should see a lawyer, who can advise you if you are about to step into a huge mess.

Answer Applies to: Georgia
Replied: 10/3/2011

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The short answer is no. The debtor's assets are part of the bankruptcy estate. They are controlled by the BK trustee. Debtor cannot transfer assets without permission of the trustee, until the trustee abandons the asset or the case is closed.

Answer Applies to: Colorado
Replied: 10/3/2011

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If the person is still in the bankruptcy process (meaning that he or she has not yet received a discharge and the bankruptcy case is still open), then that person is not legally allowed to sell any property unless it has been properly "abandoned" by the bankruptcy trustee.Whenever anyone files for bankruptcy, all assets of that person are technically owned by the bankruptcy trustee, unless they have been exempted by the debtor under the various exemptions that are allowed under state law. In Virginia, the two types of exemptions claimed by most people are the Poor Debtors Exemption and the Homestead Exemption. The Poor Debtors Exemption allows you to keep up to $5,000 in household items, $5,000 in family heirlooms, $6,000 equity in a motor vehicle, one firearm worth not more than $3,000, $1,000 in personal clothing, an unlimited value in wedding and engagement rings, an unlimited value in medically prescribed health aids, family pets, and $10,000 in tools of your profession or trade (you can double those numbers for a husband and wife in a joint bankruptcy).In addition, the Homestead Exemption allows you to keep up to $5,000 in any other assets this would include equity in a house, money in a checking or savings account, stocks, excess value in an automobile, cash on hand and other assets not protected by the Poor Debtors Exemption.When the total value of assets to be protected under the Homestead Exemption is greater than $5,000, then the excess must be turned over to the bankruptcy trustee for conversion to cash and distribution to your unsecured creditors. If the person has exempted the item of property under one or more of the foregoing exemption categories, and if he or she has already gone to the meeting with the bankruptcy trustee and the trustee has stated that he is abandoning the property (that, is giving up any interest that the trustee may have in that property), there should not be any problem with your buying the item. In addition, if the person's bankruptcy case is closed and the discharge has been granted, then you can purchase the item without any concerns, subject to the warning below. One last warning, however: if the item is something that money is owed on (such as, for example, a four-wheeler on which money is still owed), then you can't simply buy it from that person, because a lien is still on the item and you won't own it until that lien is paid off in full.If you buy it and the lien isn't paid offby the person selling it to you, then whoever has the lien can go after you and take the property away from you to satisfy the lien. Hope this helps.

Answer Applies to: Virginia
Replied: 10/3/2011

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Assuming the bankruptcy case is still open, then yes, you can purchase the property provided you have a court order or approval from the trustee. Otherwise, do not purchase the property as the trustee can invalidate the sale.

Answer Applies to: Colorado
Replied: 10/3/2011

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Purchasing property from someone who filed bankruptcy. Purchasing property from someone who filed bankruptcy cannot be done without the permission of the Trustee assigned the bankruptcy filer's estate, as well as the bankruptcy court. So before you get too far into the potential purchase, you may want to speak with a bankruptcy lawyer.

Answer Applies to: California
Replied: 10/3/2011

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It may be possible to buy property from someone who has filed bankruptcy. Be sure to find out if a bankruptcy trustee is involved. After the bankruptcy, property reverts to the debtor.

Answer Applies to: California
Replied: 10/3/2011

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If someone is still in bankruptcy, then the property belongs to the "bankruptcy estate" and would need permission from the trustee to sell. The trustee would have to "abandon" the property back to the homeowner so that they can sell the property.

Answer Applies to: New York
Replied: 9/30/2011

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To simplify, once you file for bankruptcy your property becomes part of your bankruptcy proceeding and shouldn't be sold without the court's/trustee's approval.

Answer Applies to: California
Replied: 9/30/2011

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You may need court approval for purchase of the property. You should consult attorney to discuss the fact in more details. Good Luck!

Answer Applies to: California
Replied: 9/30/2011

Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.