During a chapter 7 bankruptcy ruling, Georgia law allows an individual to retain real estate property as per the maximum amount of that dollar amount, even if the debtor’s bankruptcy case has been dismissed. An exception is made for debts which are unsecured. In other words, debts acquired by payment of money in advance but not actually received. However, one must be careful about how they use such exemption and make sure that they are eligible to retain it.
Why would anyone want to retain real estate property in a state that requires a large amount of monthly payment as a result of personal injury? The most obvious reason could be to avoid making monthly payments due to the injured party being able to transfer that payment to a new beneficiary while also avoiding the mandatory assignment of monthly payments during the pendency of the case. A second possible reason could be to avoid paying taxes on the real estate property. One could purchase a real estate property “under water” and then lease it to recover the tax liability after it has become apparent that the property cannot be sold. Of course, that situation is seldom the subject of a real estate property purchase agreement.
A third possible reason to purchase real estate property “under water” is to finance a rehab of the property. For instance, a buyer who intends to flip the property can buy it for far less than its fair market value and then fix up any issues he or she encounters along the way so it can be resale for profit. This can be done by rehabbing the home to sell it for far below the fair market value and then fixing up any defects that need fixing before putting it on the market for resale. This is an excellent strategy and the advantages are great; however, there are some disadvantages to real estate property buying underwater.
First, the laws regarding property purchased under water vary widely from state to state. In some states, a property purchased in one county can be sold in another county. The same is true of real estate purchased from a private party. Each state has its own statutes and rules governing property sales, and the courts can interpret the language of the laws as they see fit.
Second, there are many liens and other interests that can be attached to a water parcel. Buyers should be absolutely sure that the real estate they are considering purchasing is free from any liens. In addition, most counties have real estate redemption laws that prevent people from claiming back the cost of a property if they abandon it in disrepair. When buying real estate “under water”, a buyer should be especially careful to make sure there are no such legal complications. Again, the details vary from state to state, so it is best to consult a knowledgeable real estate attorney in his or her area for information about real estate purchase and sales laws.
Whether a buyer chooses to live in real estate property “under water” or on the other side of the country, understanding the purchase and sale of real estate property is essential. This knowledge allows buyers and sellers to determine if they are making a wise investment. Real estate property can be very profitable, regardless of whether it is located “under water” or not. Knowing the real property value and the legal language of the real estate laws in each state can be the difference between profiting and losing money when you make a real estate purchase.