Bankruptcy After The Auction
Does a Bankruptcy stop a foreclosure suit after the auction?
Some people I am working with (don't you love it when they come out of denial at the last second) filed a chapter 7 bankruptcy and sent it to the court about an hour after the sale. The lenders attorney says they are too late and the house is gone. In Florida there is a 10 day right of redemption, and the Certificate of Title is not recorded until this time has passed. I think if they file a suggestion of Bankruptcy within that 10 day period they have put a cloud on the title and the Court cannot issue a Certificate of Title.
Any opinions?
right of redemption applies only for redeeming the property. it has nothing to do w bankruptcy...now as far as possesion of the property goes thats another thing.....you'd have your lawyer motion the court to vacate the automatic stay and proceed with eviction if need be...(after title changes hands).. my suggestion is to offer the prior owner a few dollars to get possesion after the right of redemption expires.
Thanks for your reply lp1. You have given me some very good tips.
I apologise for not making my question clear. This time I was not the successful bidder at the auction. The sellers filed the bankruptcy (about an hour after the sale) and when they contacted me the sale had already taken place. They have agreed to sell for a decent price, a bit more than the auction but still a very good deal.
My question is does the Bankruptcy still cause an automatic stay after the auction?
Thank you
Actually if you read the statutes, Florida does not have a right of redemption in the typical sense. Instead what it is has a "protest period" in which the defendant can protest any procedural irregularities of the sale. There is a significant differences for bankruptcy purposes.
Interesting question. The property would technically be outside of the bankruptcy estate as it would no longer be owned by the defendant (his rights were cut off at the time the highest bid was accepted by the clerk). At that point I would think the act of issuing a certificate of title, which in essence would be ministerial absent a protest within the 10 period, would be outside of the automatic stay provisions. Thats my best guess without looking at any caselaw on the subject. Any bankruptcy attorneys that can chime in???
Hi jorge121
Thank you for your reply to my question. Your advice is excellent. I did call some attorneys (a specialist in bankruptcy and one in foreclosure) and they told me basically the same thing. I had not come across this situation before and I must admit I was curious. Sad thing is, I had spoken to this family not so long ago and they had it "all taken care of". Oh well, it's that denial thing again.
Another quick question, where is a good site to find case law.
Again, thank you for your help.