How To Buy Properties That Are Filed Under Bankruptcy And Owe Back Taxes?

When it comes to buying properties that are filed under bankruptcy and owe back taxes, there is a set legal procedure that one has to follow. Though the process looks very simple in theory, it is a rather complex one in reality. The property is in trouble. If you want to buy it, you must have the necessary time and resources available with you. You will have to spend a great deal of time in doing a thorough research first to find out such properties and then to find out the details about the owners of those properties and all the lien holders associated with the same. The only lucrative thing about bankruptcy properties is that they are sold for less than the assessed value. It means if you successfully purchase such a property, the chances are that you are going to get a very profitable deal. Following is a brief rundown on some of the basic steps that you must follow in this regard.

Contact The Main Parties

Before you start working on your strategies to buy properties that are filed under bankruptcy, the first thing you have t do is to contact the important parties associated with the property, such as the clerk of court office that holds the lien on that property for back taxes and the lending company that holds the deed to that property. The idea is to get crucial pieces of information from them. For example, you can inform the court clerk that you are interested in buying that property. The clerk issues a letter to all potential buyers, where it is stated in detail that how much amount of money the property owes in back taxes. Likewise, you can request the lender that holds the deed to provide you details about other liens (if any) against the property and about the approximate amount of money a potential buyer has to pay to buy that property.

The Property Is Sold Only After The Back Taxes Are Paid

As per the bankruptcy laws applicable in the United States of America, properties that are filed under bankruptcy cannot be legally sold unless all back taxes are paid in full either with a new loan or upfront. If you are a potential new owner, you will have to work with the deed holder regarding the remaining property payment.

Not All Bankruptcy Properties Are For Sale

It is also very important for you to keep in mind that just because a property has been filed under bankruptcy, it does not necessarily mean that it is available for sale. Whether it is going to be sold or not depends mainly on whether the bankruptcy has been filed under chapter 13 or chapter 7. Chapter 13 properties are usually not available for sale. However, properties that are filed under bankruptcy under chapter 7 are usually put for sale by the lien holder. Potential buyers can contact the lien holder and buy that property even before the public auction is announced.

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