Straw buyer

October 13th, 2009 by Questions

Hello,

My mother unfortunately has became a victim of a scam called a straw buyer. Her English is not that good and got suckered into signing under 2 houses that have now both stopped paying their mortgage.

Obviously she has no choice but to declare bankruptcy, correct? The houses together are valued at about 750 thousand dollars through the bank but are in such bad condition that I know for a fact they wouldn`t get 500 thousand.

Will bankruptcy just clear my mother of owing anything, and give her bad credit for 7 years? Or will she still be held accountable for that 250 thousand difference.

Will they take anything that is under her name to try to make the difference? What if she has nothing in her name?

Thanks for your time,
Concerned son

Posted from: Alberta

Questions

One Response to “Straw buyer”


October 14, 2009 at 11:15 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

I suppose there are two choices. First you could hire a lawyer and attempt to go after the people involved in this scam. While I am not in a position to suggest the likelihood of this approach, I have generally found that this is a very difficult way to proceed.

In terms of the filing of a bankruptcy, this will be cleared of her unsecured debt. Now there are some debts that are not released by bankruptcy, but it is more than likely your mother would have any of these types of debts.

In terms of assets, you don’t loose everything in a bankruptcy as there are certain assets that are considered exempt that prevent anyone from being able to seize certain items as long as they haven’t been pledged as collateral against any loans.

From the sounds of it I would suggest that you contact a
local trustee to investigate things in greater detail.

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