Bankruptcy w/ Lease Options and Assignments

the only stupid questions are the ones you don't ask.

Myers Real Estate Solutions

Surprised no one has any advice on this... Really?

1- Yes you have to sign your name, it may be under your co name but you are the authorized signature for that business.

2-NO you are not a broker, you are selling your rights of interest to the deal/home you have under contract.( assignment of contract).

3- I have not done a lease option but if i remember correctly you will be the seller in the end. You have leased the property with the option to buy. so when your end buyer buys from you for say 300k and you have a deal for 270k with the owner you will close both deals buy/sell. I believe you double close that deal but again i have never done those so if someone has please correct me if need be.

With an assignment you can do it in your company name but like i said you still will be putting your name on the contract. But I have an idea that would work for you, think outside the box as Dean says, there is always a solution to things. partner with someone else who owns enough shares and is authorized to sign the contract. I know your name will be on the biz but you will not be on the contract, The only thing im not sure of is since you would be an officer of the co would you be considered accepting the debt even though your partner signed the contract. Or you can get a partner that trusts you and use your knowledge and have them do the assignments, no biz really needed since you will not be closing on anything.
Allison, dont ever be afraid to ask a question, that is what makes this site so great. Someone will always answer your questions without judging you.
good luck
Richie

1- Yes you have to sign your name, it may be under your co name but you are the authorized signature for that business.

2-NO you are not a broker, you are selling your rights of interest to the deal/home you have under contract.( assignment of contract).

3- I have not done a lease option but if i remember correctly you will be the seller in the end. You have leased the property with the option to buy. so when your end buyer buys from you for say 300k and you have a deal for 270k with the owner you will close both deals buy/sell. I believe you double close that deal but again i have never done those so if someone has please correct me if need be.

With an assignment you can do it in your company name but like i said you still will be putting your name on the contract. But I have an idea that would work for you, think outside the box as Dean says, there is always a solution to things. partner with someone else who owns enough shares and is authorized to sign the contract. I know your name will be on the biz but you will not be on the contract, The only thing im not sure of is since you would be an officer of the co would you be considered accepting the debt even though your partner signed the contract. Or you can get a partner that trusts you and use your knowledge and have them do the assignments, no biz really needed since you will not be closing on anything.
Allison, dont ever be afraid to ask a question, that is what makes this site so great. Someone will always answer your questions without judging you.
good luck
Richie

1- Yes you have to sign your name, it may be under your co name but you are the authorized signature for that business.

2-NO you are not a broker, you are selling your rights of interest to the deal/home you have under contract.( assignment of contract).

3- I have not done a lease option but if i remember correctly you will be the seller in the end. You have leased the property with the option to buy. so when your end buyer buys from you for say 300k and you have a deal for 270k with the owner you will close both deals buy/sell. I believe you double close that deal but again i have never done those so if someone has please correct me if need be.

With an assignment you can do it in your company name but like i said you still will be putting your name on the contract. But I have an idea that would work for you, think outside the box as Dean says, there is always a solution to things. partner with someone else who owns enough shares and is authorized to sign the contract. I know your name will be on the biz but you will not be on the contract, The only thing im not sure of is since you would be an officer of the co would you be considered accepting the debt even though your partner signed the contract. Or you can get a partner that trusts you and use your knowledge and have them do the assignments, no biz really needed since you will not be closing on anything.
Allison, dont ever be afraid to ask a question, that is what makes this site so great. Someone will always answer your questions without judging you.
good luck
Richie

I must have hit enter too many times, I was not patient with my computer lol.

I like your Drive!

Way to bounce back.

This is not Legal Advice just my thoughts.

1) Yes you do have to sign your name as you are the owner of the LLC. The LLC basically means that someone sues you they can not come after your personnal belongings. Just what the LLC has.

You would be collecting an assignment fee (This is not debt) You could either collect your assignment fee from the buyer, You could also have it put on the HUD. On the HUD it would be listed under Reductions due to seller.

Now, I don't think that you could do a double closing because you would have to close first and that would show a debt for an hour or a day. This might be a little Hairy!! You are not a broker!!

You could also partner with someone and use their name to close!
Other wholesalers, you could partner up with and split the fee.
Use your options and don't give up.

One step back Two steps forward!!

Good Luck

Jay C

In signing contracts you are an equitable owner Thats All!
In a Lease Option you are just that.

you learn something everyday. I didn't know you couldn't incur only 1500 in debt in 5 yrs. Wow! That seems hard. I guess I would consult with an re attorney and explain your situation. Maybe they know how, but it may be that your hands are tied. However, I have never heard a bankruptcy as stopping people from starting new businesses, I don't think, so hopefully someone will have some insight. Otherwise, ask another attorney about it.

Thank you to those of you that responded. I guess I'll have to do some digging and figure this out.

I guess I can think about getting a partner. My problem is who? Anyone I know already thinks I can't do this. And I guess I have trust issues. (Forgive me, I'm a New Yorker, I can't help it.) I'll get thinking.

Thanks again. Anyone else with ideas is welcome to share!

Sounds like you need good legal advice. This is something we could all learn from, that's why this site is the best we are always learning.

I know there must be more members who know something about this.
Where are you?

Hello,
I spoke to my bankruptcy attorney because of your question. I was advised that I would have to ask the courts (through my attorney) to allow me permission to incur debt. This would give the creditors that I filed against a chance to dispute my right to gain debt. This would need to be for each property that I want to get into an agreement. I was advised that it would take up to 30 days for approval. I would also have to report any increase in income so my trustee payments could be adjusted accordingly. I have to be in bankruptcy for 3 years before I can pay it off and then if I pay it off at that point, the trustee can request that I pay the complete amounts to the creditors and if pay interest on the total amount. Those decisions are left up to the trustee. However, I cannot be criminally charge for anything. I look at it this way, I have $20,000 in bankruptcy and if they would charge an interest minus what I have already paid, I may have to pay $25,000 to clean it all up. Now, I plan to work around this because I have a 50% partner starting with me and we will draw up a notarized agreement between the both of us that everything will go into his name and he will pay me the 50% as if I was a contractor and 1099 me and then I can pay my own taxes and I will be able to report my income change to the courts. Then I will pay everything off and pay any penalties if needed and then once it is cleared up in a year or two, we incorporate and combine our interest together. I am only trusting to do this with a very close friend. My attorney did not like knowing that I was going to do this but he stated that it is an acceptable simplified work around. It could get a little sticky, but I refuse to lose and stay in the rut I am in. Hope this helped and Go Luck!

Hey there Randall,
Thank you so much for that information.

I'm glad for you that you have someone to go into business with 50/50. That's great! I myself don't know anyone whom I can trust and that would do that. My family thinks I'm nuts for even thinking I can do this. But that's ok. I'll figure it out on my own. This whole hing just has me a bit scared, which I didn't need. I worry too much about to begin with. (LOL)

Best of luck to you!

So from the information I've gathered on this site and personal research, I can try to answer your questions. I have no clue about your first question, but from the other responses it would seem you already have your answer: yes, your name does go on any loans you or your business incurs.
When doing assignments of contract, you are putting the company name with "and/or assigns", but when signing the purchase and sales(p&s) agreement, it's your name you are signing the document with, not a business company signature. So my conclusion would be that you are still incurring that debt personally, even if the p&s agreement is assigned through an assignment contract. To the matter of your second question, though, the way you are paid is through the assignment contract, as an assignment fee you are paid from the person(cash buyer) that you are assigning the p&s agreement to.
Finally, concerning lease options, I am making the assumption you are referring to sandwich lease option, where you are taking on a homeowners mortgage and then finding a buyer to lease option the house for purchase. In this case, you are buying the property "subject to" - meaning incurring the debt of the current mortgage on the property. Then you lease option the property to a final buyer.
That's my take. Don't let this information discourage you,; as people keep saying: there are solutions, we must go out and find them.
-Stephen

The "debt" you are incurring is only debt if it is on your credit report. If you borrowed 2k from someone it isn't going to show up there. Assigning a contract or doing a lease option isn't incurring any debt. You are not applying for any credit/loans or credit cards. You could definitely do this,
without incurring any debt.

I appreciate the info and am plannign on going the lease option route soon. I'm updating my business sites and letters and contracts. I also need a few more power team members, but I'm moving forward. I have to do something! And this seems the safest... I figure as long as it's not on my credit report it should be okay, but I have a new question...

1) I have to send in a copy of my tax return papers to the bankruptcy court assigned trustee every year. How can I explain what I'm doing to make this money? I guess I can ask my attorney what an acceptable answer is?

What do you think?

Thanks for asking those question Success32. I am not on bankruptcy, however, my inquiring mind needed to know how this whole L/O system works as well. Sandwich Lease Options, also Subject To's. Great info DG family. Again, thanks for everyone's input.

I guess Success32, we had better refine our Power Team and quickly! You'll never know when we might really need them.

Romaluv22
Signing Out,