My buyer filed for bankruptcy and was discharged in October 2010. His condo fees were included and discharged. I know that he is still responsible for payments after the discharge. However, I have an approval on his short sale, we're ready to close this week but we got the Estoppel that says he owes them over $12,000! The seller has zero funds, the bank will only give a years worth of payments ($1800) and the buyer is only willing to contribute $1000.
The association's attorney will only communicate with me by email and has already rejected my offer of $1000. Now, they are not responding at all!
My question is, if the majority of his payments were discharged, wouldn't he only be responsible for the last six months, plus late fees and attorney fees?
The bankruptcy has released your SELLER from paying the debt...doesn't mean that there is no outstanding debt. You are better off finding a buyer who will kick in the difference (or do the difference from commission or go 1/2 with the buyer - $4,600/each).
You need to remember this next time. The association cannot come after the seller for the money, but that doesn't mean that they cannot collect the money from someone else (lender/buyer/etc).
Also, get in contact with the attorney. Tell him that the lender has only approved $1,800 to go to the association and that you can have the "buyer" kick in another $4,200 (which would be $1k from the seller, and the rest coming from the agents/buyer/however you work it out). See if they will settle for 1/2 the balance owed.
Do NOT tell them that the seller is paying a portion of this...this could be seen as reaffirming the debt! Always, always, always the buyer is paying it. Always!
Thank you for your reply!
I have been able to get the association to take $4300 and the lender is going to contribute an additional $1000 ($2800 total) and the buyer has agreed to contribute the remaining $1500 so it looks like we are going to be able to close this!!