Legal Question in Bankruptcy in Michigan
our land contract vendor is in bankruptcy
We have purchased a condo on land contract and now the person we bought from is now in bankruptcy. They still have a mortgage against the property as well. The value of the condo has dropped dramatically and we cannot refinance or sell. We don't know what is going to happen as the person we bought from is not giving any information. This entire situation has been a disaster and we would like nothing more than to get out of this situation and get back to apartment life. We also don't know if we should be sending the payments to the person we bought from or if we should hold it in escrow. The question is how can we get out of the land contract if possible and what to do with our payments until we figure something out?
2 Answers from Attorneys
Re: our land contract vendor is in bankruptcy
I would recommend consulting with an attorney with some bankruptcy experience. The bankruptcy might not be an issue if you want to continue residing there, but that depends on whether the seller is paying it's mortgage with your payments, etc.
Re: our land contract vendor is in bankruptcy
In order to give a complete opinion, I would need to see all of the documents in question. Your vendor's bankruptcy filings are a matter of public record and could be obtained with minimal difficulty.
Your vendor's interest in the land contract is now property of the bankruptcy estate in all likelihood. Enforcement of the contract, if any, would likely come from the bankruptcy trustee.
Depending on your circumstances, I could see that you might be able to walk away or negotiate a departure. Again, it all depends on the specifics in your documents because there are a number of ways that things could have been done.
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