In-laws want to sell us their house after bankruptcy

[BottomLine]

What is the name of your state? TX

My In-laws filed for bankruptcy about 1 year ago. I believe Ch13. We recently informed them that we were looking to purchase a house and, since they are having difficulty making the payments again with this house (because my father-in-law's medications for diabetes), they offered to just sell us their house to keep it in the family (my father in law grew up in this house). House has about $30K in equity, they only want about $5K. I'm not sure if the house was included in the bankruptcy because I know they worked out a forbearance with the mortgage company and refinanced at a lower rate. Would we be able to buy the house from them at a price just above the mortgage balance or even enough to finance some repairs? The house needs some serious work done. Thanks.

 

[LostinMI]

I think the first thing you need to figure out for sure is if your in-laws filed chapter 13 or 7. If they filed chapter 13 then they are in the middle of a 3-5 year payment plan. And the mortgage is somehow a part of that. They will have to find out from their lawyer/trustee IF/HOW they can go about selling the home.

If they filed chapter 7 and just reaffirmed (or retained) the home, then that is a totally different story and there should be no issue with their selling the home more than a year after filing.

 

[BottomLine]

They are on a payment plan. Is that a clear indication of a Ch13?

If we don't purchase their house, they will likely end up losing it because they are struggling with the house payment, bankruptcy payments, and $300+/mo medications. I read something about a hardship discharge. Considering their situation with the expenses from his illness, how likely is it they would qualify for this? Thanks for the input.

 

[bigun]

Sounds like they filed a Chapter 13 to get current on the mortgage.The secured debt had to be paid at 100%.
They and you really need to speak with their attorney and get all options explained.
Yes, the code does provide for a hardship discharge.

http://assembler.law.cornell.edu/uscode/html/uscode11/usc_sec_11_00001328----000-.html

b) At any time after the confirmation of the plan and after notice and a hearing, the court may grant a discharge to a debtor that has not completed payments under the plan only if—
(1) the debtor’s failure to complete such payments is due to circumstances for which the debtor should not justly be held accountable;
(2) the value, as of the effective date of the plan, of property actually distributed under the plan on account of each allowed unsecured claim is not less than the amount that would have been paid on such claim if the estate of the debtor had been liquidated under chapter 7 of this title on such date; and
(3) modification of the plan under section 1329 of this title is not practicable