How to seperate properties in a bankruptcy?
Question Details: My parents home is in NY and their investment property is in PA; they are in foreclosure. They have also filed for bankruptcy. Is it possible to separate the 2 properties and payoff the debt from the investment property or buy the investment property from them? I'd like to save one of the properties and eventually take ownership once the overdue debt is paid off.
Once they filed for bankruptcy, which is what you indicated they did, you cannot pull out parts of their property and assets and deal with them separately; doing so is regarded as a fraud on the creditors, who have (subject to pre-existing liens and mortgages) recourse against all their assets. You have to let the bankruptcy play out--though if they do not "reaffirm" a mortgage in the bankruptcy and so the lender forecloses, at that time, you may be able to buy the property from the lender or at the foreclosure sale.
Unfortunately, the time to have purchased property from your parents was *before* they initiated bankruptcy. As stated, once they start that process, they have to let it proceed.