Bankruptcy release/short sale
I got a call from the lender I had dealt with on a short sale that I thought was dead in the water. They seemed willing to discuss until I mentioned that the homeowner had filed bankruptcy.
They clammed up real fast, and said they couldn't discuss anything until the "bankruptcy was released." What does this mean in moronese?
BTW, Sorry about my hiatus, everyone. Life has been getting in the way lately. I'll try to participate more in the next few weeks.
Andrew
hi wonderboy:
once the debtor/homeowner files for bankruptcy, an automatic stay (also known as a section 362 stay) goes into effect which suspends or stays the ability of creditors, including the lender/mortgageee, to foreclose on their interest in the property. The lender will have to have the stay lifted by the bankrutpcy trustee. Because the lender is a secured creditor rather than an unsecured creditor, i.e. they can satisfy the amount owed to them by taking back the property rather than going against the debtor, the court will likely lift the stay and allow the bank to proceed with the foreclosure. This is what the bank meant. Hope that helps.
I see. Thank you for clearing that up. (I've never experienced bankruptcy, at least yet. lol)
Does this apply to any chapter of bankruptcy, or one specific type?
Andrew