Sale or Refi After Sheriff Sale (Post Ch7)

[keh]

Long story short is that its my house I'm looking at all options on my house. You see, I took a job in the mortgage biz, racked up a bunch of credit card debt trying to survive, didn't make it, got a new job with crappy pay, couldn't make my payments, filed ch7 and am losing my house (located in Minnesota). When I filed I did not reaffirm the mortgage.

The house is post sheriff sale, and this is the only reason I might be able to afford to keep it. My first was 200k, and a 2nd for 75k but appraised value is probably 190-220. It sold at the sheriff sale for 115k plus legal fees and interest until redemption.

So my questions are...

1. In the unlikely event that I find someone to refi me for the ~115k (about 60% LTV) what happens to the 2nd? Is it gone because it was redeemed post sheriff sale? I assume they would normally be able to come after me for judgement, etc but I'm guessing the BK wiped out that possibility?

2. If I were to sell the property for say $175k will the bk courts take the difference between the redemption amount and the sale amount? Does it go to the 2nd mortgage company or is it ours?

3. If we sell to an investor or relative who is willing to buy for the $120k is the 2nd mortgage gone altogether?

I'm guessing there are stop gaps so that any potential equity (above 115k) wouldnt be ours but I'm so confused with this process and nobody I talk to seems to really know how the whole process works - even the HUD counselors.

I have checked with my attorney a month or two ago and he said that I would have to file some new paperwork with the courts if I wanted to sell which would be about $500 including his filing fees, but I havent been able to clarify what the logistics of that would be and what if any benefits there would be to us doing that. Thanks for any help and advice you can give...

Keith

[justbroke]

If you're filing Bankruptcy then I don't know why you even want to entertain these thoughts.

Sure, it would be cool, to sort of stiff the Bank, but they'll get a deficiency (perhaps) and still come for the difference. Plus, you'll have to pay the $115K plus any back taxes owed anyhow, plus any other fees that the buyer had to pay to get a clear title.

First, the paperwork, is that you'll have to file a Motion to Sell Property Free and Clear of Liens. Your lawyer will be better at me anyday at this, but I don't know how you do that because you no longer have the title (deed) anyhow. You are only trying to exercise the redemption option under non-bankruptcy law which would revert the title (deed) back to you through a redemption process. Sounds messy.

If you did get money from this... I'm (totally) guessing that the Trustee would come looking for the proceeds. That's because it was property of the Estate and they'll scream bloody murder. Sounds messy.

I can't find the caselaw, but there was a case in which someone did something similar. They got the Bank to stipulate to the value being some really low value. The Trustee abandoned the property from the Bankruptcy Estate. The debtor then motioned the court to sell the property, and then made lots of money (tens of thousands of dollars) on the sale. Then declared that the proceeds were exempt because the Trustee abandoned the "property" from the estate.

So, why not just let it go?

[HHM]

1. If you are post sherrif sale, you don't own the home anymore, there is no loan to refi. You would essentially have to purchase the house from the bank.

2. As said above, if the house has already gone to sherrif sale, you don't have the right to sell.

What fact might I be missng?