Executory Contract

[cathywhite4495]

Hi guys!
I used this forum extensively a year ago when I successfully filed a Chapter 7 pro se. Things have been great with the exception of my house. I have a land contract that I entered into before the bankruptcy. It was a short-term contract with a balloon payment due at the end of 18 months (which was 2 months ago). The person I'm buying from had said orally and in emails that she would extend the contract if I couldn't get financing at the end of the contract. Big surprise - now that the contract is up, she's changed her tune and now she's threatening to evict and sue me because I didn't make the balloon payment (I've continued paying the regular monthly amount). She's also trying to force me into a contract with really bad terms.
I could have rejected the contract when I filed but I was trying to do the right thing and I kept it. I didn't want to leave the person stuck with a house. I had no idea she would try to pull all this shady junk.
When I looked over my paperwork and the law, I'm wondering if I did actually reject the contract, I sent her a notice that I intended to assume the contract but I never sent the second notice that I think is required. Is there a chance that I can walk away from this nightmare?!?! I would just like to rent for a couple of years, save up money and buy a house the proper way.
I have a call in to the trustee from my case and a lawyer but I'm going crazy waiting.
Here's the law:
(1) If a lease of personal property is rejected or not timely assumed by the trustee under subsection (d), the leased property is no longer property of the estate and the stay under section 362 (a) is automatically terminated. (trustee didn't assume)
(2) (A) If the debtor in a case under chapter 7 is an individual, the debtor may notify the creditor in writing that the debtor desires to assume the lease. Upon being so notified, the creditor may, at its option, notify the debtor that it is willing to have the lease assumed by the debtor and may condition such assumption on cure of any outstanding default on terms set by the contract. (I did this)
(B) If, not later than 30 days after notice is provided under subparagraph (A), the debtor notifies the lessor in writing that the lease is assumed, the liability under the lease will be assumed by the debtor and not by the estate. (I did NOT do this part)
Thanks in advance!

[justbroke]

I've been reading about Executory Contracts and Unexpired Leases myself, as I'm a pro se filer, and have a Residential Lease which I'm the lessee, and another Residential Lease which I'm the lessor.

In any event, I believe your reading is correct. Unexpired Executory Contracts and Leases are automatically rejected on discharge in a Chapter 7 or upon Plan Confirmation in a Chapter 13.

Since you didn't technically assume the lease, it is summarily rejected. However, I've read where intent plays a role as well. in one particular case I read, a debtor-lessee did reject a contract (through failure to assume even though they listed in the SOFA and Intentions that they would assume it)... later tried to reject it, but the court found that they were a debtor-in-possession and that their intent was clearly to keep it.

If the Lessor didn't pay attention to the elapse of the 60-day expiration of the assumption or rejection of the Executory Contract or Lease, then they made a problem.

However, I don't see where they are not still entitled to damages for non-performance.

But then again, I'm not a lawyer.

[cathywhite4495]

Hi,
I heard back from the trustee and I thought I'd post the answer for the curious.
He said land contracts are very difficult in bankruptcy (which I knew from reading some cases). Since I did file a statement of intent that I was going to assume AND lived here for a year after that, he said she owner could probably win in court. I should have either rejectd or moved out right away. It's not clear cut like with a reaffirmation.
Bummer - I'm stuck with the house and the owner is still trying to add thousands of dollars to the purchase price. I refuse to do that so I don't know if I'll be sued. Sucks to go through bankruptcy and still have something like this hanging over my head.
I hope this is a word of warning for other people about reaffirming/ assuming loans!

[justbroke]

Yes, unfortunately your intent and your actual actions, are what will be used in court to discredit you.

I hope all goes well for you.