Action 9 investigates homeowners sued to pay for someone else's debt

ORLANDO, Fla. — A Volusia County man claims he could be kicked out of the house he bought three years ago to pay off the seller's bad debts. It's an incredible homebuyer's nightmare triggered by a change in bankruptcy law.

Action 9 found it could put many local homebuyers at risk who thought they bought a house at a great price.

Brian Miller feels under attack. Three years after buying a modest vacation home, a lawsuit threatens to take away a property Miller owns free and clear.

"I actually got sick, physically sick," said Miller.

A bankruptcy trustee sued to reverse the sale and claim the property. The lawsuit alleges the seller had filed bankruptcy eight months after closing and sold the home way under market value.

So now, Miller had to pay someone else's bad debts.

"I'm just mind blown that this could happen in this country," said Miller.

A recent bankruptcy law change allows creditors to go after properties if the sellers hide assets.

The lawsuit claims Miller was part of a conspiracy.

"If anyone wants to look at it and say I got a good deal, I challenge them to that," said Miller.

Documents show the home was an eyesore, on the market for 400 days, and the crash deflated values.

Miller said he paid $75,000 and spent $25,000 on improvements.

"Last I knew it wasn't illegal to get a good price," he said.

Think about the thousands of wrecked foreclosure and short sale properties that sold at fire sale prices the last few years. What if those sellers filed for bankruptcy later?

"It's going to lead to all kinds of unseen consequences in the market," said real estate attorney Karen Wonselter.

Wonselter said Miller's case reveals how hundreds of local home buyers could also be at grave risk.

"There's nothing the buyer could have done to prevent this," she said.

Unless Miller challenges the lawsuit, he automatically loses the house.

"And I'm being penalized for working hard and saving and buying something. Last I knew that was supposed to be the American way," said Miller.

Miller had title insurance but it does not cover a new legal threat after the sale. The bankruptcy trustee in Denver, where the seller lives, has not responded to any of Action 9's contacts.

WFTV