Question: can your home be foreclosed on if your in bankruptcy ?
Answer: – No, not while in bankruptcy. Bankruptcy only postpones the auction though for 6 to 8 weeks until your bankruptcy is released, unless you file chapter 13 which is a workout option. If you fail to meet what’s agreed upon, then the foreclosure begins where it left off. We wrote a small article about Bankruptcy you can read more about.
I have been approached by a homeowner who just recently filed for bankruptcy protection, but she’d still like to sell her house likely through a short sale since she is also in foreclosure. Is a short sale still possible to sell her house? Or, is she now protected from her lender by the bankruptcy? I’m not as familiar with bankruptcy laws, but wondering if this is something that can be done.
Thanks,
Tracy
Yes, you can still do a short sale. Right now, since the homeowner has filed bankruptcy, all you can really do is have them fill out the paperwork so that when the bankruptcy is discharged, you can continue with the short sale. Get everything signed, get the workout packet from the bank, send them back whatever they ask for and just wait. Whatever you do, don’t record anything. You can’t do that.