Filing BK and foreclosure redemption period?

[BROKEDED]

I am in a non-judicial state. A bankruptcy paralegal I talked to said that we had until the end of the redemption period to file BK7, which is 10 days after the sale date. Are there any unintended consequences with doing this vs filing before the sale date?

[DebtZombie]

Si, I dont think this is the same question, but may be close.....

My brother and his wife in Colorado are 6+ months behind in house payments. They have not received ANYTHING from the lender except late payment notices. They know they will have to file BK and give up the house, but want to know WHEN is the best time. they lawyer says 'whenever they feel like it".

I told them I would ask around and told them to get a new attorney! HA!

Ideas? They want to stay as long as possible, as they will have to move in with her sister and obviously they would like to delay it as long as they can.

[tobee43]

we didn't wait for the sale date at all...actually it's been 2.7 years and there is NO sale date on our house at all.

we filed chapter 7, surrendering the property and listed the fees...cost etc. as unknown....when you surrender your property in the bankruptcy, the house IS the collateral...any deficiency, foreclosure costs and fees, would be covered when you surrendered the house...at least that is how it was explained over and over to us by our atty.

i have spoken to the bank that has our house...actually THEY called after our discharge and after we have been out of the house over 2 years, now, asking if we'd like to reaffirm.....i don't know what part of "surrendered" they didn't get, or the fact the bank has been maintaining the property...changed the locks etc. for over 2 years...the ONLY thing they haven't done is complete the foreclosure process...

i really do not understand why the paralegal is stating you have to wait...i know many people in a non-judicial states that did exactly what we did...did you ask her or him why...if the house is surrendered and listed on the bk petition??

[BROKEDED]

No no, the paralegal didn't say we had to wait. I'm sorry, our sale date is in a few weeks so we have little time. Due to the cluster fudge with our loan servicer and our modification we want to file before the foreclosure is complete to halt the process.

I wanted to know if there were any downsides to filing after the sale date during the redemption period or if I really needed to push to get filed before the sale.

My goal is simple...stay in the property as long as possible. It doesn't appear at this time that the bank is going to postpone the foreclosure sale to allow the modification paperwork to get to a negotiator. So, the plan at this point is to file BK, check "surrender" on the house, go to our 341, and then wait to see if the servicer files to lift the stay. If they do, then we'll file a motion to dismiss their request on the grounds that we are still waiting for the results of the modification process. If our motion is denied then we'll stay until we have to move. If our motion is granted then we will continue to wait for the results of the modification to see if it's worth persuing. If it is, then we may stay until the bank jerks the rug out from under us or until we decide to move.

I just wanted to know if there were cons to waiting until the redemption period to file.

[tobee43]

No no, the paralegal didn't say we had to wait. I'm sorry, our sale date is in a few weeks so we have little time. Due to the cluster fudge with our loan servicer and our modification we want to file before the foreclosure is complete to halt the process.

I wanted to know if there were any downsides to filing after the sale date during the redemption period or if I really needed to push to get filed before the sale.

My goal is simple...stay in the property as long as possible. It doesn't appear at this time that the bank is going to postpone the foreclosure sale to allow the modification paperwork to get to a negotiator. So, the plan at this point is to file BK, check "surrender" on the house, go to our 341, and then wait to see if the servicer files to lift the stay. If they do, then we'll file a motion to dismiss their request on the grounds that we are still waiting for the results of the modification process. If our motion is denied then we'll stay until we have to move. If our motion is granted then we will continue to wait for the results of the modification to see if it's worth persuing. If it is, then we may stay until the bank jerks the rug out from under us or until we decide to move.

I just wanted to know if there were cons to waiting until the redemption period to file.

oh, i see, that's a bit different...so actually, you are considering attempting to stay in the house longer in attempt to what??? when you file the process should go into auto. stay...or should stop or halt all action..i know it did with us...and we wanted the bank to continue but the stay was put in place and they couldn't move.

i don't know what the cons are other than you can stay longer for "free"... and perhaps save some money...or are you actually wanting the loan mod if it goes thru...i think what i'm asking you... what is your ultimate goal??

[ccsjoe]

If you file prior to actual sale date you get a full stop on the foreclosure process due to the auto stay. Even if they file a Motion to Lift the Stay, they have to reschedule the sale, etc. If you file post sale but pre redemption if they lift the stay it becomes a matter of the clock continuing and then filing an eviction. Sounds to me like if your goal is more time, filing before sale date is the way to go.

[BROKEDED]

Ummm, I don't understand what you mean by "full stop". I originally thought that once you filed CH7 that the stay was in place until you were discharged and I believe that use to be pretty much the norm. Now it appears, at least in my state, that the bank will often file a motion for the stay to be lifted a few weeks after the 341 and it's often granted unless there are extenuating circumstances.

Your post brings up the next question I had which was IF the stay WAS lifted, did the bank have to reschedule a legal sale and thereby a redemption period since the process was interrupted by the Bankruptcy filing, or did the property go straight to the bank if I had checked the "surrender" box in my filing? Which ties back in to the original question of whether filing before the sale date made a diffence in all this if the stay was lifted.

Based on what you said it sounds to be better safe than sorry to file before the sale date but I just don't know if I have enough time. Any more insite is appreciated.

[debee]

... did the property go straight to the bank if I had checked the "surrender" box in my filing?

No, they will still have to follow your state laws in terms of the foreclosure. I don't know what the law is in NC, but it usually includes things like the length of time required to advertise for the trustee sale, hold the trustee sale, and so on.

To get the most time in the property you'll need to file bk before the sale date.

[ccsjoe]

Here's the deal. By full stop I meant they can't just pick up where they left off (e.g. 2 weeks to sale date) once the stay is lifted. They have to reschedule the sale for whatever date is available.

Marking surrender on the box means nothing from a title standpoint. You are discharging the debt, your name still needs to be removed from title. BK handles the $$$ part, foreclosure (through sheriff's sale or public auction or trustee sale, whatever name), deed in lieu, short sale, etc removes your name from title. These are two separate actions regulated under separate laws; one does not trigger the other.

I can try more detail if needed, but not sure how much more I got.

[BROKEDED]

tobee43 That is it, stay longer, rent free or with a greatly reduced modified payment while saving money. We don't want to keep the house long term but it IS a place to stay for now...moving sucks. Our nearest neighbors are a**holes and I fear our neighborhood has seen most of it's better days. The HOA is not far from being there in name only and after that it will probably turn into anything goes. That's fine if you live in the country and your neighbor down the road see things 180* from you but it doesn't often work out well for property values in small neighborhoods.

We started a mod to see if it would provide some sort of stop gap measure in allowing us to say longer during the whole foreclosure bankruptcy thing. But after months of holding our paperwork and finally (supposedly) having it sent to another office to a negotiator, that office has closed and all it's files sent back to the servicer's address. Those files are (supposedly) sitting in boxes waiting to be received and reprossessed and are not considered "in-hand" any more which is (supposedly) needed to request a sale date postponement. The last person said that it actually has to be in a negotiator's hands to consider it. We were advised to basically start from scratch and resubmit everything but the time line for that to be received and processed is just as long as waiting for someone to dig it out of a box. So it doesn't look like lenders have to go to the trouble of losing files and having to rerequest them anymore. They simply just sit on them and tell you that they haven't gotten to the required stage yet when the sale comes due.

Honestly, if I was one of the unfortunate people that had NO place to turn after losing my house and the bank had treated me like they are doing now, violence would probably not be off the menu in my head. I am really astonished that we haven't seen stories like the guy that flew his plane into the IRS building more often....especially considering all the bank fraud that's come to light in the past couple months.

[tobee43]

Originally Posted by BROKEDED
... did the property go straight to the bank if I had checked the "surrender" box in my filing?

for some...don't i wish!!! darn bank of mine will NOT let go and sell our property

...so the word surrender...debee what's the term of intent? i know debee had it on another post...however, the bank may never actually foreclose...one just never knows today. now that does not mean they can not send you a NOD and you will eventually have to vacate the premises.

[BROKEDED]

ccsjoe Gotcha... I actually know a lot of this but just getting all the pieces put together in my head in the right order is difficult at times. I didn't think I would be too stressed over this seeing as we had resigned ourselves to do this some time ago but apparently it is taking it's toll. I'm sure after we're discharged it will all be clear as a bell and I'll be able to easily see any mistakes we made on the way. Hopefully at that point I won't care. HA!

[debee]

...debee what's the term of intent?

Not sure if I know specifically what I said before, so this is my best guess answer: when the OP checks off "surrender" on the statement of intentions he is only declaring what he intends to do with the property. It's meant to make the bk process easier because once upon a time when the automatic stay went into effect there was a lot of confusion about the property securing loans (cars, fridges, couches, houses, etc). Now it's much clearer and creditors can send out reaffirmation agreements if they require those, or the repo man, or whatever, etc.

There's another thread on the forum that I read earlier today about someone filing bk and then once it was discharged hiring their lawyer to delay the foreclosure as long as possible.

[tobee43]

Not sure if I know specifically what I said before, so this is my best guess answer: when the OP checks off "surrender" on the statement of intentions he is only declaring what he intends to do with the property. It's meant to make the bk process easier because once upon a time when the automatic stay went into effect there was a lot of confusion about the property securing loans (cars, fridges, couches, houses, etc). Now it's much clearer and creditors can send out reaffirmation agreements if they require those, or the repo man, or whatever, etc.

There's another thread on the forum that I read earlier today about someone filing bk and then once it was discharged hiring their lawyer to delay the foreclosure as long as possible.

close enough for "government" work!! thanks i went blank..but you did post it somewhere ...i just can't recall which thread it was.

[BROKEDED]

debee By law there has to be at least a 20 day notice before the foreclosure hearing (had that) and then at least 20 days notice before the sale date (in that right now) and then a 10 day redemption period after the sale.

So if the sale has happened but the full 10 day redemption period had not lapsed and the stay is lifted during BK, the bank DOESN'T need to redo the sale???