QUESTION
Is there any way to prevent a backruptcy from stalling a foreclosure on a commercial property prior to signing the papers for the sale?
Asked on Jan 18th, 2016 on Commercial Real Estate - California
More details to this question:
I am selling the property above, and am carrying 100% of the paper on it. In the event that I am forced to foreclose for non-payment, I understand that if the borrower files for bankruptcy, it will stall the foreclosure. Is there any way to get around this before the sale is finalized?
1 ANSWER
Estate Litigation Attorney serving Redlands, CA
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No, the borrower has a constitutional right to file for bankruptcy, so long as the borrower qualifies for bankruptcy protection. Usually, the biggest hurdle to filing for bankruptcy is that the borrower must be insolvent. While filing for bankruptcy would stall any foreclosure sale, the lender can still request the bankruptcy court for relief from the automatic stay. This would just postpone the foreclosure, but would not stop it.
Answered on Jan 18th, 2016 at 3:08 PM