Q: commercial in AL with owner finance. Buyer stopped paying after 2 years and filed for bankruptcy. What can the seller do
Commercial property in ALABAMA was sold in 2017 with owner financing with 30% down and 7 years of monthly payments at 6%. The contract was recorded in court house as a lien. The buyer (LLC) with personal guarantee paid on time for 2 years and now filed for bankruptcy (both LLC and personal).
What recourse do we have as a seller (C -Corporation)?
A: You can take the property back and sell it to someone else. You have no recourse against the bankrupt buyer unless the bankruptcy isn’t discharged.
A: What kind of bankruptcy did the owner file? Chapter 7 or 13? Do you have any reason to believe the owner might be hiding other assets from the bankruptcy court? A consultation with an experienced and capable attorney would probably be well worth the expense. You need to file a motion to get the right to foreclose on your property without recourse from the buyers. There are specific steps you must take in order to be absolved from violating the automatic stay. Do not "self help" in this situation. I highly encourage you to seek capable counsel. You will have to hire an attorney in this situation, because corporations cannot be represented by their owners, directors, or shareholders in Alabama unless those individuals are licensed and practicing Alabama attorneys.
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