Re: Seller of Subject To Then Files BK

Bankroptcy laws come in different flavors, and all of course, are Federal. Given the complexity of the 7, 11 & 13 statutes, you really can't get a definative answer without knowing the particulars.However, that doesn't preclude me from having an opinion:

BK court will most certainly require any and all creditos or record to be listed in the filed schedules. This would presumable include loans in the debtors name and/or loans for which the debtor has any financial obligation. So, those secured creditors will be put on notice that the cat is out of the bag, as far as your transfer goes, if your subject-to transfer does not meet the requirements of a Garn-Saint Germain Act secured loan.

Court appointed trustee could go back several months (2 months? 6 months? I don't recall) and compell court to unwind the transfer of BK debtor's assets and return them to the BK estate.

The are other scenarios, too. Perhaps the court would ratify your transfer and force a court order that would, indeed, help you, at least as to Garn-Saint Germain Act due-on-sale clause, if applicable and if a concern to you, the subject-to buyer.