Please help - bank foreclosed a week after we filled chapter 7!!!

[eener]

We received notice 3 weeks ago that our home was scheduled to be foreclosed on 9/17. We filed chapter 7 on 9/12 and stated that our intention was to surrender the home. We filed on the 12th (and borrowed money to do so) to halt the foreclosure.

I just did a judicial index search and on 9/20 a foreclosure judgment was entered.

I called my attorney and the paralegal said, "You are surrendering your home, what's wrong?"

Me, "I thought they had to have the stay lifted before they could foreclose?"

Paralegal, "It hasn't been sold; the auction isn't until the first Monday of the month. You don't have to be out of your house tomorrow."

Me, "We were trying to get as much time as possible and hold off the foreclosure."

Paralegal, "I will let him (the attorney) know."

Since I got nowhere with that and I'm FREAKING OUT I called the clerk of court. She informed me that they never received anything from my attorney stating that we filed for bankruptcy and our attorney would need to send over the paperwork. I asked if the judgment would be overturned and she said she wasn't sure, that the judge would have to look over everything.

Please give me advice as to what to say and to whom. I want to know what to expect. I thought that they couldn't foreclose and that this would hold that off for a few more months (so that we could save while my husband works as much overtime as possible). My attorney knew we were filing on the 12th to halt the foreclosure. 1-2 more months is not enough time for us to get out of our house without removing money from my husband’s 401k. I was hoping this would buy us until at least January and I was going to attempt a short sale or deed in lieu.

I'm completely overwhelmed and terrified! I have a 2 year old and we currently have no money, we gave everything to our attorney so we could file to stop this!

[LadyInTheRed]

Paralegal, "I will let him (the attorney) know."

To which you should have said, "Will he or you call me back? When?" Call back and ask to speak to the attorney. If the attorney isn't available, leave a message for him to call you back as soon as possible. Ask when you should expect to receive a return call and then call again if you don't hear back by then.

I know this is upsetting, but freaking out doesn't help anything. You will get better results from your attorney and his staff if you remain calm.

[eener]

I was calm on the phone - it was the paralegals lack of concern that put me in a state of panic. My attorney won't be in again this afternoon and the paralegal leaves at 3:00.

I just want to know what to expect, I want to be as prepared as possible when I speak to my attorney tomorrow. I don't want to fumble over my words and I want to know what he's going to tell me before he tells me.

The stay should have completely halted the foreclosure, right?

[tobee43]

since south carolina is in fact a judicial state you should be able to have a judge step in and stop the process once the bk has been filed. additionally, you MUST have been served something with some type of court date????? and, since you are in a judicial state, it must go through the court system which ususally takes a bit to process, so i'm really surprised you rec'd a date so quickly????

a quick search yield the following:

- Judicial Foreclosure Available: Yes

- Non-Judicial Foreclosure Available: No

- Primary Security Instrument: Mortgage

- Timeline: Varies

- Right of Redemption: No

- Deficiency Judgments Allowed: Yes

In South Carolina, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure

The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold.

In South Carolina, the property is generally sold in the following manner:

A notice of sale, containing a description of the property, the time and place of sale, the borrowers name and the lenders name, must be published at the courthouse door and two other public places at least three weeks prior to the date of sale. The notice must also be published in a newspaper of general circulation within the county where the property resides for the same time period.

Unless otherwise ordered by the court, the sale must be conducted at the courthouse where the property is located by the sheriff of said county. The sale must be held on the first Monday in each month, unless it is a holiday and then the sale may take place on the following Tuesday. The sale may begin at 11:00 am and go until 5:00 pm, but the sheriff may close the bidding prior to that time.

Despite the fact that the bidding at the public sale has ended, in South Carolina, the auction actually stays open for a full thirty days after the date of the public sale. During this thirty day time period, anyone may place a bid higher than the last bid amount and the successful purchaser will be the one with the highest bid at the end of the thirty days. This ongoing bid process is referred to as upset bidding. Anyone, other than the successful purchaser, who has placed a bid during this time, will be entitled to a refund of any deposit made in good faith and he or she will have no further interest in the property.

If no objection to the sale price of the property has been filed with the sheriff's office within three months after the date of sale, the sale will be considered confirmed and the sheriff will make any necessary deed endorsements.

Lenders in South Carolina may file for a deficiency judgment against the borrower and borrowers have no rights of redemption.

[HHM]

Something is not adding up. In NO state do you only receive a FIRST foreclosure notice 3 weeks before the sale. So, in that regard, forgive me if I am not that sympathetic. So somehow, I doubt that the letter 3 weeks prior to the foreclosure was your first indication of foreclosure.

Based on what I could find, SC is a judicial foreclosure state. In that regard, you may not have as much an issue as you think. The lender must go to court to get the Final Judgment of Foreclosure....AND THEN sell the house later. So the fact that there is a Foreclosure Judgment at the court is not the issue. The lender still needs to notice the sale.

Since it is unclear exactly where you are in the process of foreclosure, there is no concrete advice that any of us could give. You need to gather what paperwork you have about the foreclosure, and SCHEDULE an appointment with your attorney to sort it out.

HOWEVER, keep in mind, chapter 7 bankruptcy only "stalls" foreclosure, it doesn't stop it. Odds are, if the lender already has the court order, they could resume foreclosure in as little as 45 days after your BK filing date if they move quickly on the Motion for Relief from Stay. http://www.**********.com/blog/2011/...nk-foreclosed/ So Either way, you need to start planning to move within the next two months.

[eener]

Something is not adding up. In NO state do you only receive a FIRST foreclosure notice 3 weeks before the sale. So, in that regard, forgive me if I am not that sympathetic. So somehow, I doubt that the letter 3 weeks prior to the foreclosure was your first indication of foreclosure.

Based on what I could find, SC is a judicial foreclosure state. In that regard, you may not have as much an issue as you think. The lender must go to court to get the Final Judgment of Foreclosure....AND THEN sell the house later. So the fact that there is a Foreclosure Judgment at the court is not the issue. The lender still needs to notice the sale.

Since it is unclear exactly where you are in the process of foreclosure, there is no concrete advice that any of us could give. You need to gather what paperwork you have about the foreclosure, and SCHEDULE an appointment with your attorney to sort it out.

HOWEVER, keep in mind, chapter 7 bankruptcy only "stalls" foreclosure, it doesn't stop it. Odds are, if the lender already has the court order, the could resume foreclosure in as little as 45 days after your BK filing date if they move quickly on the Motion for Relief from Stay. http://www.**********.com/blog/2011/...nk-foreclosed/ So Either way, you need to start planning to move within the next two months.

We received the Lis Pendens in May and we heard nothing until we found out the court date of September 17. We were not served with notice of a court date and found out because the banks attorney sent a letter to a company that has a judgement against my husband. We have had some additional hardships over the last year (we planned to file a year ago) and had to scrape the money together to file to try to buy us more time in the house.

I'm asking, shouldn't filing chapter 7 stop the bank from getting the foreclosure judgement until they are able to have the stay lifted?

How were they still able to get the judgement? Will that judgement be reversed?

If it won't be reversed or I have no chance of that, I need to know why. We filed on the 12th (and my attorney knew this) to buy us as much time as possible in our house.

[eener]

Based on what I could find, SC is a judicial foreclosure state. In that regard, you may not have as much an issue as you think. The lender must go to court to get the Final Judgment of Foreclosure....AND THEN sell the house later. So the fact that there is a Foreclosure Judgment at the court is not the issue. The lender still needs to notice the sale.

We were trying to hold off the judgement for another month or 2. They can't sell the house until after the judgement (the auction is on the first monday of the month).

My question is, shouldn't filing bankruptcy prolonged everything? The foreclosure judgement shouldn't have happened until after the relief of stay, right?

[LadyInTheRed]

The stay should have completely halted the foreclosure, right?

Yes. But, as the court clerk told you, the state court has to receive notice of the BK. Your attorney should be able to tell you whether the judgement can be vacated. I don't think the foreclosure sale can take place without getting a release from stay.

Based on the info tobee43 posted, it sounds like the soonest the actual foreclosure sale will take place is the first monday in November because there isn't enough time to publish notice before the first monday in October. Once the sale takes place, it apparently isn't final for 3 months. Confirm all of this with your attorney, but it sounds like the worst case is that you have to move in February. If your goal was to stay until January, that may be why the paralegal didn't seem concerned.

[eener]

Yes. But, as the court clerk told you, the state court has to receive notice of the BK. Your attorney should be able to tell you whether the judgement can be vacated. I don't think the foreclosure sale can take place without getting a release from stay.

Based on the info tobee43 posted, it sounds like the soonest the actual foreclosure sale will take place is the first monday in November because there isn't enough time to publish notice before the first monday in October. Once the sale takes place, it apparently isn't final for 3 months. It sounds like the worst case is that you have to move in February. If your goal was to stay until January, that may be why the paralegal didn't seem concerned.

Thank you!

We want "as much time as possible" but hoped for at least January. We are looking for a rental, but there is not much out there in our price range.

I'm also confused about the 3 months after the auction. At that time will we be evicted? I don't want anything negative to appear on our credit or public record after this. I don't want a notice to vacate to even be filed. Is that what will happen if we stay the full 3 months?

[LadyInTheRed]

I'm also confused about the 3 months after the auction. At that time will we be evicted? I don't want anything negative to appear on our credit or public record after this. I don't want a notice to vacate to even be filed. Is that what will happen if we stay the full 3 months?

You won't be evicted until title passes to the new owner, which doesn't take place until the confirmation of sale. It is the new owner that must evict you. So, assuming the information posted is correct, you can stay the full 3 months and perhaps even longer if the new owner doesn't evict you right away. If you don't want an eviction proceeding initiated, move out before the 3 months expires or as soon as you recieve a notice from the new owner.

The following website talks about the process in South Carolina and is consistent with what toobee43 posted: [Sorry Red, deleted the link, that blog post is actually misleading}

[tobee43]

Something is not adding up. In NO state do you only receive a FIRST foreclosure notice 3 weeks before the sale. So, in that regard, forgive me if I am not that sympathetic. So somehow, I doubt that the letter 3 weeks prior to the foreclosure was your first indication of foreclosure.

Based on what I could find, SC is a judicial foreclosure state. In that regard, you may not have as much an issue as you think. The lender must go to court to get the Final Judgment of Foreclosure....AND THEN sell the house later. So the fact that there is a Foreclosure Judgment at the court is not the issue. The lender still needs to notice the sale.

Since it is unclear exactly where you are in the process of foreclosure, there is no concrete advice that any of us could give. You need to gather what paperwork you have about the foreclosure, and SCHEDULE an appointment with your attorney to sort it out.

HOWEVER, keep in mind, chapter 7 bankruptcy only "stalls" foreclosure, it doesn't stop it. Odds are, if the lender already has the court order, the could resume foreclosure in as little as 45 days after your BK filing date if they move quickly on the Motion for Relief from Stay. http://www.**********.com/blog/2011/...nk-foreclosed/ So Either way, you need to start planning to move within the next two months.

i agree, something is missing? again as hmm points out your bk will only stall the process. and as lady points out and i agree, and think the foreclosure sale can not take place without getting a release from stay.

[HHM]

It's not clear what reversing the judgment would even accomplish. It is not as if they have to go through the entire process again. Once the automatic stay is lifted, the lender simply needs to submit a new order for the judge to sign. So, that is not where I would be directing any energy or money. The Auto Stay should/will prevent the sale (assuming the sale didn't occur prior to filing BK). Any further action on the foreclosure must cease until the lender gets the Automatic stay lifted. Once the stay is lifted, it is back to the regular foreclosure process.

It sounds like you have some time. Basically, from the foreclosure sale date, you have 4 months until the deed transfer becomes official. Assuming you simply made sure that the bank does not schedule a sale date until the Auto Stay has been lifted, you, conservatively have until March, 2013 before you would need to be out of the house. As such, I wouldn't be wasting time, money, or energy in trying to get the judgment reversed, just make sure all the parties involved in the foreclosure have been notified of the BK.

[LadyInTheRed]

The following website talks about the process in South Carolina and is consistent with what toobee43 posted: [Sorry Red, deleted the link, that blog post is actually misleading}

Thank you, HHM! I didn't catch whatever was misleading.

[eener]

It's not clear what reversing the judgment would even accomplish. It is not as if they have to go through the entire process again. Once the automatic stay is lifted, the lender simply needs to submit a new order for the judge to sign. So, that is not where I would be directing any energy or money. The Auto Stay should/will prevent the sale. Any further action on the foreclosure must cease until the lender gets the Automatic stay lifted. Once the stay is lifted, it is back to the regular foreclosure process.

It sounds like you have some time. Basically, from the foreclosure sale date, you have 4 months until the deed transfer becomes official. Assuming you simply made sure that the bank does not schedule a sale date until the Auto Stay has been lifted, you, conservatively have until March, 2013 before you would need to be out of the house. As such, I wouldn't be wasting time, money, or energy in trying to get the judgment reversed, just make sure all the parties involved in the foreclosure have been notified of the BK.

I assumed it would take at least a month to have the stay lifted and then another 6 weeks before the court date was set for the judgement. That's 2.5 extra months and the auction would be in January at the earliest. That's what I was hoping for with this entire process and this judgement throws a wrench into that plan

With all the research that I've done in the last couple of hours I'm now wondering about cash for keys? Is that a real option? Will the bank offer us money to get out and leave the house in good, clean condition? It might help me feel a little better about tapping into our 401k (with a loan) if we can get that money back from the bank.

[eener]

Quick update -

The judgement was vacated! The hearing for the motion to lift the stay will be on 11/13 and I doubt the court date for the new foreclosure judgement will be before January. It cost me nothing, all my attorney had to do was email the attorney representing the bank.

We had our 341 meating this morning and everything went well. I doubt we were in front of the trustee for more than 3 minutes.