What do I do as a creditor?

[explorinandy]

I sold a home to a buyer using seller financing. Things were going fine until the buyer could no longer make his payments and filed chapter 7 bankruptcy. The home is in AZ but the bankruptcy was filed in Nebraska.
The buyer has already moved out of the home and given me the keys, although it is legally still his.
I spoke with the Bankruptcy trustee and they stated that he is going to "surrender" the home.
I have no interest in trying to collect any delinquent payments, I simply want the deed transfered back to me (and so does he).
The value of this home is almost certainly less than what he owes me.
So my questions are...
-Will I need to foreclose on this property once the bankruptcy is complete?
-Can we file a "deed in Lieu of foreclosure" instead of going through the foreclosure process? From what I have read, that seems like a better option.
-Is there a possibility that I would not get the home back?
-Do you think I need to hire my own attorney to guide me through this process or do you think the home will eventually be turned back over to me without much conflict.
-Any other issues that I should be aware of?

Thanks for any thoughts or suggestions--Andy

[nc73]

Die? Sorry I didn't think creditors post here! I suppose its been done before.

[DeadManCrawling]

Andy,

Welcome to the board. Yes, you can file a DIL and if the borrower is cooperative you should have an easier time of it. I would have someone check the house, if you are not in the same area, for damage and to see if it is occupied. Either of those may change your plans a little, though the same outcome will be reached in the end.

I am creditor in two different BK cases right now, one personal, one business, and am learning more about the process than I imagined possible.

Good luck

[mrskal]

I would definately talk to an attorney if it were me. I have never been through that, but the thought of it just makes me think you want to cover all bases legally.

[ohiogal]

Die?

Yikes! That's a bit harsh, isn't it??

[tcreegan]

deed in lieu

I think nc73 meant dil (deed in lieu) which is what Andy should do with a cooperative borrower. Much quicker than a foreclosure, get the house back on the market instead of sitting vacant. As a secured creditor with a loan equal to the collateral value, you should get the house back. BUT, you probably need to file documents with the bankruptcy court; proof of claim maybe, relief of the stay, not sure. Would you have to attend the meeting of creditors? Here is where a good lawyer earns his pay.

Good luck,

Tom

[justbroke]

Please please please please consult an attorney (and hire one). A deed-in-lieu will not get you clean title. The title may be defective and the only way to get a warranty deed -- and appropriate title insurance -- may be to foreclose.

I highly suggest an immediate consultation with an attorney.

[frogger]

I would suggest that you foreclose in order to be assured of a clean/clear title. It will cost more money, but it's worth it.