Kingsland, TX asked in Bankruptcy, Foreclosure, Real Estate Law and Probate for South Carolina

Q: What Federal law allows an Executor of Estate as the only Trustee the court right to sell inherited [mortgage]?

Through Probate [mother willed son to be the Executor and Trustee of their home in South Carolina] whereas the mortgage has gone into the Foreclosure process. He has filed Chapter 7 solely upon the mortgage debt, but the mortgagor will not release the home or accept any offers for said home. What must he do to demonstrate that the mortgagor is to allow him his right to [liquidate assets] sell the property as it is ordained through probate courts. The home has been rebuilt due to fire damage and now appraises well above the balance of the loan. The home is the only real property/asset of the estate and he believes [Planet Home Lending] the mortgage lender wants fair market price and to have all foreclosure fees paid off rather than to have him come current or pay off the loan.

2 Lawyer Answers
Anthony M. Avery
Anthony M. Avery pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Probate Lawyer
  • Knoxville, TN

A: Not sure of your question. But if there is a Ch 7 BR then the Trustee owns the property unless there is an agreed reaffirmation or surrender of the property by the Trustee. The will and probate do not control here if the property did go to him and he went bankrupt. Heirs might file suit and claim title, but it will be difficult.

W. J. Winterstein Jr.
W. J. Winterstein Jr.
  • Bankruptcy Lawyer
  • Boyertown, PA

A: Despite the express wording of Section 506 of the Bankruptcy Code, the US Supreme Court has ruled that there is no "cram-down" of secured claims in a Chapter 7 case, and the provisions of Ch. 13 likewise prohibit a "short sale" of mortgaged property where the holder of the first mortgage objects to such sale.

An estate is not eligible to file for bankruptcy relief.

In other words, if the first mortgage balance is greater than the sales price of the property to be sold, the bankruptcy court will not/cannot order a sale of that property.

As a practical matter, if the heir or owner of the property is unable to make current debt payments to the first mortgage holder, and the property is not worth as much as the debt, why would that owner try to retain the property just to sell it?

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.