Bankruptcy filed last year and discharged can you do a short sale?

I have a client that told me he filed Chapter 7 bk last year and it was just discharged a few weeks ago. He contacted me to short sell his house which I did list. Now I have an offer on the  property and moving through the negotiations with B of A. Does this sale have any hope in closing? How do I proceed? What does the discharge actually do and mean? Thanks

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Replies to This Discussion

Permalink Reply by Cami Pinsak on June 23, 2010 at 12:21pm
Yes, there is hope... I closed a discharged bankruptcy with Owb FIRST AND b of A second. It took some doing, but we did close it. You will need to send in the discharge notice to the bank as part of the short sale package.
Permalink Reply by Kelly Magreevy on June 23, 2010 at 12:23pm
Just got that from my seller..do I upload it with Equator under supporting documents?

Cami Pinsak said:
Yes, there is hope... I closed a discharged bankruptcy with Owb FIRST AND b of A second. It took some doing, but we did close it. You will need to send in the discharge notice to the bank as part of the short sale package.
Permalink Reply by Cami Pinsak on June 23, 2010 at 12:26pm
Mine was last year - so Equator was just getting started. But I would say Yes.
Permalink Reply by Kelly Magreevy on June 23, 2010 at 12:43pm
Thanks Cami, thought I made a big mistake in taking the listing. So I will just upload the documents for the bankruptcy discharge along with the other forms. thanks

Cami Pinsak said:
Mine was last year - so Equator was just getting started. But I would say Yes.
Permalink Reply by Cami Pinsak on June 23, 2010 at 12:48pm
definitely counsel your cooperating agent that this may be a while...Get some good back ups, too!
Permalink Reply by Kelly Magreevy on June 23, 2010 at 1:19pm
Was just told that I have to get permission from the trustee to list and sell the property is this true?

Cami Pinsak said:
definitely counsel your cooperating agent that this may be a while...Get some good back ups, too!
Permalink Reply by Cami Pinsak on June 23, 2010 at 6:10pm
If it is discharged - no I do not believe so. My experience has been that there is only a trustee during the bankruptcy process. That is why the filer has to wait until it is "discharged". That being said...I find the banks ( ironic) woefully inept when it comes to bankruptcy.
Permalink Reply by Stephanie Lim on June 24, 2010 at 1:06am
After it's discharged you don't have to get permission from the trustee. The discharge means that the debt was wiped out but does not transfer title of the home back to the bank. The bank has to take title back in some way deed-in-lieu, short sale, foreclosure.... If they do it through foreclosure it can still show up on the credit report as a foreclosure even if the debt was previously discharged through bankruptcy.
Permalink Reply by Keji Ogunleye on June 24, 2010 at 8:03am
Yes.. If the bankruptcy is discharged. Call the title company to check for you to make sure is discharged. I have the same situation last year.. My seller filed chapter 13 , then chapter 7 and they was discharged. We closed the short sale.
Permalink Reply by Shannon Noble on June 29, 2010 at 1:08pm
Yes, it can short sale. Proceed like a regular short sale.
Permalink Reply by Laura Marshall on June 30, 2010 at 4:11am
Same as the others - yes. My clients BK was discharged in June of last year. Bank of America 1st - Citi 2nd - closing today.
Permalink Reply by Debbie Franklyn on July 4, 2010 at 12:30pm
I have one also in Equator with B of A being the first. We are still negotiating. I sent in the discharge paperwork. No problems yet.

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