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One of Two Seller filed for BANKRUPTCY after signing offer.

We put down an offer on a house that we really like. Seller accepted the offer and after signing the offer they informed our Realtor that one of the two seller is filing for Chapter 13 Bankruptcy. Does this slow down our process and we have 15 Days Due Diligence as of today (1/25/12). The Closing date is supposed to be on Feb 23, Should we wait and or should we cancel the offer as we might lose our earnest money if we pass the due diligence. We have to wait for the courts to accept the bankruptcy for the seller which might take time...... Confused now...
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January 25 2012 - Marietta
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Answers (3)

If the home mortgage is included in the creditor list and they are seeking a discharge on the home loan then it will delay otherwise you may be fine but consult a lawyer.
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February 19 2013
I would reccommend you consult with your broker and attorney on this issue. Not being well versed on bankruptcy laws I don't feel comfortable answering the question. Not knowing your entire contract, your earnest money would normally be in jeopardy if you go past the due diligence period without an extension signed by both parties. You should really address these issues with your agent/attorney. Hopefully, you are using the services of a buyer representative agent.
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January 26 2012
Definitely a question for an attorney not the internet.
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January 25 2012
 
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