Any �retroactive� provisions for Real Estate that was lost just prior to filing?

[ignorant1]

[lrprn]

A few questions first....

Did you walk away from the house or did you lose it in court through repossession by your lender? When exactly did you lose the house?

[HHM]

I think you need to clarify the "contract" thing. As a LRPRN asks, what exactly did you lose.

[ignorant1]

[HHM]

I am not sure how you technically have equity? Equity is based on the difference between the value of an item and any liens, if any.

But to answer your question, no, those rules would not apply to this situation, and even if it did, that equity would be taken by the trustee, I don't think you can homestead a real estate contract.

[ignorant1]

[justbroke]

[HHM]

The problem here, is you defaulted on the contract. Unless it is a poorly drafted contract, I can't imagine you have much of a remedy. You already answered your question, "if I had a chance to sell the house.". well, you defaulted on the contract and the seller exercised his rights.

The problem is, as of today, you have no asset or interest. There is nothing to include or not include in the BK. This is not a voluntary transfer on your part, so none of those avoidence sections of the BK code would apply. Furthermore, in a chatper 13, asset issues are moot point. The only real concern of the trustee is disposible income.

[ignorant1]

Wow. Thank you SO much. I really appreciate your help.

Are you are effectively saying that the retroactive negation of prior actions/transfers can only be for those actions initiated by the person filing BK? (Things done voluntarily done by me, versus actions by others?)

And I will definitely look into that "equitable right of redemption"

THANKS AGAIN!

[HHM]

For the most part...

There is only 2 ways a trustee, or a debtor acting as a trustee, can recapture assets for the BK estate.
1. Preferential transfer, you voluntarily paid a creditor in preference to other similarly situated creditors.
2. Fraudulent transfer, you voluntarily transferred an item of property out of your name with the intent to hinder, delay, or prevent creditors from getting at that asset.

Even so, let's assume you could undue the contract, for the sake of argument, it's not clear if there would be any benefit to you for doing so and doing so could materially impact your BK.

This was a normal-course transaction, the seller duly exercised his rights (presumably), and you defaulted.

[justbroke]

I agree with you HHM that under bankruptcy law, those are the only two recourses for voiding a transfer of property.

I was mentioning non-bankruptcy law under the right of redemption (which differs between the States).

I wonder if a person could, under the non-bankruptcy right of redemption, file a Bankruptcy case, and then initiate an Adversary Proceeding to determine the applicability of the redemption and whether the Bankruptcy Estate can cure any default causes by the non-bankruptcy action.

Just wondering. I know... beware of wonder.

[ignorant1]

[HHM]

Very interesting.

I wonder if the right of redemption is different under a Real Estate Contract versus a traditional mortgage foreclosure process? (Judicial vs. non judicial or something along those lines?)

I highly doubt it. It would be an odd thing indeed if a state extended the same type of redemption to a contract as a foreclosure. Again, you haven't even mentioned what state you are from, so any advice would be limited. Under the general rule, the answer to your question is no. Contract law does not provide for any right of redemption. In fact, in your case, the contract defines the rights you have, and since the contract provided for a 30 day cure right, and you didn't cure, as I said above, you probably have no remedy.

[justbroke]

HHM is much more thorough than I am. I was going to write something similar, but not so detailed. The real question is whether a Contract for Deed is considered the same as a Mortgage in your State.

If not, then HHM again goes back to the law of contracts. You breeched the contract and didn't cure the default. If your state treats contracts for deed as non-mortgage contracts (which they probably are just "contracts"), then you have no recourse.

And, just because I was curious, I did a little research on this... This was from an article on Contracts for Deed and sums up what HHM is saying...

To the extent that the forfeiture provision is effective, the contract for deed enables the vendor to avoid the purchaser's equity of redemption, the foreclosure process, and other traditional protections afforded to debtors under the law of mortgages.

Hence they are considered different, but I'd still look to the underlying State non-bankruptcy law to be certain. It appears that they are treated, in most States, as Executory Contracts.