Can I buy my parents home?

Asked over 1 year ago - Reynoldsburg, OH

My parents have filed for bankruptcy. Their house is free and clear and on the market to sell to pay off the debt. Am I allowed to buy the house? I have contacted to banks and received two different answers to this question. The one that said no, referred to a "family bailout". So, can I buy my parents house?

Attorney answers (4)

  1. Scott Benjamin Riddle

    Pro

    Contributor Level 20

    6

    Lawyers agree

    Answered . Some key details are missing. Are they in Chapter 7? Is the Trustee selling the house? The short answer is that just about anyone with the money can buy the house in an arms length transaction, and it likely requires Court approval. Try mortgage brokers to get a loan, and speak with the Trustee. If it is not a Ch. 7 and a Trustee, you need to provide more details.

  2. Diane L Gruber

    Pro

    Contributor Level 18

    6

    Lawyers agree

    Answered . If the bankruptcy trustee is in the process of selling their house, you will need to deal with him/her, NOT the mortgage bank. BTW, how can a house be "free and clear" AND have a mortgage bank involved? Good luck.

    Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662.... more
  3. Alan D. Walton

    Pro

    Contributor Level 19

    6

    Lawyers agree

    Answered . Yes. You need to pay a price that the Trustee finds acceptable and that the court approves. If you get a reasonable offer in before the Trustee lists it for sale, some of the avoided commission costs could reduce the overall price. If you plan on financing with a mortgage, some lenders are skittish about loaning funds when the bankruptcy court is in control. You may have to shop around for a willing lender.

  4. Robert Michael Fox

    Contributor Level 10

    3

    Lawyers agree

    Answered . You are not being clear as to whether or not your parents are still in Bankruptcy. Is the trustee making a motion to sell property under 363? if so, you would eligible to purchase the home. If by "free and clear" you mean, your parents have already filed for BK, no reaff was filed on the mortgage, and their case was closed, and you are attempting to complete a short sale, then you probably cannot. Most lenders do not want this tactic used simply for the seller to shave off a hefty portion of the loan, simply by using a front man, such as a family member to purchase the home. Short sales are subject to the "arms length" rule.

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