Foreclosure And Bankruptcy
What happens when you buy a property at a Sherrif's sale and the same day the owner who lives in the house files for bankruptcy? Can I evict the owner, who is now a tenant, from the house. Does filing for bankruptcy do any thing to your purchase?
Come to think about it, what is the difference between foreclosure and bankruptcy?? Regardless, the owner does not own the house anyways, right?
did you pay cash for the property? from what i know of people in foreclosure who files bk, they have just bought themselves time to try to do something to save their homes.
I had a client once who had that exact scenerio who had the sherrif sale the next day and they filed bk, that bought us some time and we were able to buy time to find a lender to do their deal. (i'm in the mortgage industry by the way)
Postponing the foreclosure sale by filing bankruptcy only works if you file it before auction. Here, it seems they filed right after the property was sold at auction. I would think, given the house does not belong to them, they can be evicted just like a regular tenant. Bankruptcy could potentially stall eviction process, so I would recommend talking to an eviction attorney regarding this.
By the way this is only assuming there is no redemption period. I am not sure how this would work if there is one.
[ Edited by reinatalie on Date 10/28/2004 ]
Hi all,
If I am not mistaken, until the ROR period, (10 days here in NJ), is up, the original owner still owns the property so, filing BK shall null and void the Sheriff Sale. The highest bidder should get their bid money back. Please correct me if I am wrong. Thanks.
Filing a post sale, Chapter 13 will serve to protect and prolong the Right of Redemption. It doesn't nullify the Sheriff's sale.
However, if the BNK was filed before the Sheriff's sale... that may be a different matter.
bankruptcy acts as an automatic stay against any pending litigation-- even without notice--so if the bankruptcy was filed prior to the sale, then the sale may be problematic.
If the bankruptcy was filed after, you still have a problem evicting, because filing a lawsuit against someone with a pending bankruptcy without obtaining court relief fromt he automatic stay makes you liable to the owner for damages.
Time to hire a lawyer :cry: