Chapt 7 & Foreclosure - Posted by Alanna

import · February 16, 2006, 5:54pm

Posted by John Merchant on February 17, 2006 at 20:31:42:

When the court enters an order Lifitng the Stay, all parties are free to do what they want with that house…so long as the foreclosing creditor is game and willing.

Once the BK discharge is entered the debtor is fre to sell the property.

import · February 16, 2006, 5:54pm

Chapt 7 & Foreclosure - Posted by Alanna

Posted by Alanna on February 16, 2006 at 18:54:59:

I was talking to a person in pre-foreclosure and she had filed chapter 7 bankruptcy, but is still going to the sherrif’s sale with her home. I am not sure when the bankruptcy was filed. I thought that a Chapt 7 would wipe out her debt with the bank? What happens when a property goes into foreclosure and then they file for a chapt 7 bankruptcy? Thanks!

import · February 16, 2006, 6:27pm

Ch 7 “stays” FCLR - Posted by John Merchant

Posted by John Merchant on February 16, 2006 at 19:27:33:

The law is the very instant the Ch 7 is filed, the foreclosure action is legally “stayed” and the FCLR action is stopped still for several weeks.

Then the bank files a Motion to Lift Stay, the Bk court grants it, and the FCLR happens later.

The BK action only eliminates the bank debt but not the lien, so FCLR isn’t permanently killed.

import · February 17, 2006, 2:18pm

Re: Ch 7 “stays” FCLR - Posted by Natalie-VA

Posted by Natalie-VA on February 17, 2006 at 15:18:11:

John,

Under your scenario where the debtor is in chapter 7 and relief from the stay is granted, can the debtor sell the property without the approval of the BR court?

Also, a related question, if the chapter 7 is already discharged, can the debtor then sell the property?

–Natalie

import · February 16, 2006, 6:38pm

Re: Ch 7 - Posted by Alanna

Posted by Alanna on February 16, 2006 at 19:38:08:

Okay, so the bank can’t get thier money back from the owners but they can still take the property back?

And if they are in the process of foreclosing, is it legal for the bank to change the locks before the sherrif’s sale? The homeowners still hold the deed until the sherrif’s sale, so how can the bank come in and change the locks without the owners permission?
That happened to the same homeowner I was talking to. Thanks!