If the owners of the house that we have been buying via owner financing are filing Chapter 7, how will we be affected?

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If the owners of the house that we have been buying via owner financing are filing Chapter 7, how will we be affected?

We have been making payments for a year.

Asked on August 8, 2013 under Bankruptcy Law, Washington

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Yes it can indeed.  When the owners file Chapter 7 it will be the Trustees decision to either "assume" or terminate the contract.  This type of contract is known as an Executory Contract, meaning that the contract has not expired and is still in effect.  You really need to speak with an attorney here who can help you protect your rights.  Good luck.


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