If my husband and me are going to get a houseboat on a promissory note between us and the owner, what happens if they file for bankruptcy?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
If my husband and me are going to get a houseboat on a promissory note between us and the owner, what happens if they file for bankruptcy?
The owner owes money to the bank on the houseboat. If we do the promissory note and the owner decides to file for bankruptcy, what will happen? Will we lose the houseboat even though we have a promissory note to buy it?
Asked on November 21, 2013 under Bankruptcy Law, Kentucky
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
Yes, you will almost certainly lose the houseboat and most, if not all, of any amounts already paid to the owner when he files for bankruptcy:
1) If he owes money to the bank on the boat and doesn't pay, then the bank will repossess the houseboat--filing bankruptcy does NOT stop that, though it will save him from having the bank sue him from any surplus owed over the then then-current value of the houseboat. You will have no right to get the boat from the bank...though it's possible that if you know who the bank is and contact them, that they may choose to sell to you at some mutually agreeable price.
2) Once he files bankruptcy, your ability to recover the money you've paid him will be extremely limited.
If possible, avoid entering into transactions with people who are or may be in financial distress.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.