Sheriff Sale
iv been looking into sheriff sale auctions and I get listings for NJ. The listing show homes that are going for auction. The day before auction is scheduled some of the listings go from auction to bankruptcy. I undersand what a bankruptcy is but i dont understand what happens to the ownership of the home. Can this home be puchased from the bank or are the homeowners protected from this.
When a debtor files bankruptcy there is a blanket stay on all attempts to collect debts of any kind from the debtor. If you will pardon a farm analogy the personal and real property of the debtor gets put into a "trough." Some will get taken out as exempt or abandoned. Secured creditors get to eat first from the trough in order of priority. Because the bank has a mortgage that secures their note, they can seek relief from the stay to take the house off by themselves and gorge. Keep up negotiations with the bank, the ownership hasn't changed and they will eventually be able to foreclose.