QUESTION
What if the bank sells house after borrower files bankruptcy?
Asked on Jun 18th, 2012 on Bankruptcy - Michigan
More details to this question:
If I buy a property in a trustee sale under foreclosure, and later find that the bank wrongfully sold the property when the original owner already had filed a chapter 13 before the auction date, What exactly happens? Do I lose the whole money I bid for the home or does the trustee have to return the money I paid. What rights do I have in case I am stuck with the house I bought at the auction against the old owner who is in bankruptcy?
5 ANSWERS
As against the old owner, you lose. However, make sure that the debtor's filing was not the third in a year or in some other way was ineffective to stop the sale. As against the foreclosing bank and its trustee, you are golden, assuming you can find the suckers and they haven't run off the Brazil with your money.
Answered on Jun 27th, 2012 at 6:10 PM
Criminal Law Attorney serving Fremont, CA
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Steven J. Alpers, A Professional Corporation
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I am assuming that the bank got the money. If they had knowledge of the bankruptcy they could not sell. If they did not have knowledge, because they were not notified in time, then the sale should be good and you should have title. The bankruptcy trustee would have to take actions to set aside the sale which would entitle you to get your money back.
Answered on Jun 27th, 2012 at 5:13 PM
You need to consult with an attorney now. You are entitled either to the property or your money back.
Answered on Jun 27th, 2012 at 2:17 PM
1 Award
The Trustee is required to fully refund what you paid at the foreclosure sale plus interest if the sale is set aside due to BK, or other sale impropriety.
Answered on Jun 26th, 2012 at 4:08 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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If there have been errors and procedures always makes things significantly more complicated. I would suggest that you see an attorney as quickly as possible bringing with you all of the information and documents relevant to the transaction. It is only after examination of them is a firm opinion can be reached, your options defined.
Answered on Jun 26th, 2012 at 4:02 PM