Legal Question in Real Estate Law in California

Re: real estate purchase from person who filed for bankruptcy

One of the automatic effects of a bankruptcy filing is to strip the bankrupt party of many of the rights he or she formerly had in property. With some exceptions, a bankrupt person is stripped of his or her property, which becomes the property of the "bankruptcy estate."

Therefore, ordinarily a bankrupt person really has no property (with exceptions, as for exempt items such as clothing, work tools).

If you want to acquire property from a bankrupt person -- or, technically, from the bankruptcy estate -- you need to deal with the trustee, who in turn will need bankruptcy court approval for any proposed sale of a major asset.

If you are seriously considering buying real estate from a bankrupt, you should retain local counsel with bankruptcy experience.