questions & answers

Question: I was in a chapter 13 with my only debt being my mortgage. I found out Monday my house has been sold at auction. I never received any type of notifications that my chapter 13 had been dismissed,or any notifications that I was in foreclosure, as a matter of fact I had sent the mortgage co $4,000 the previous month. I believe the sale of my house was illegal since I was never notified..Is this true, if I am never given the opportunity to save my house which are required by law and can I do anything about it now that it's been sold?

Answer:

There are many variables in the question that make it difficult to give any definite answer, and legal advice is always beyond the scope of AZLawHelp.  That being said, it is always possible an error was committed in the process, and the possibility of an error may increase when there are multiple legal processes at work at the same time, such as a bankruptcy and foreclosure.  Unfortunately it is also possible no error was committed, the point being that an attorney will need to review the matter to say for certain. 

Generally when a bankruptcy is filed, an automatic stay goes into effect ceasing collection efforts and proceedings, including foreclosure whether it's a judicial foreclosure or trustee sale.  However, simply filing and completing bankruptcy does not mean that a borrower will get to keep the home.  A bankruptcy will usually wipe the debt but the lender can usually take the property after the bankruptcy unless there is an agreement where the loan is reaffirmed.  This is because the lender loses the right to collect but not the security interest in the property.  However, bankruptcy can be useful for re-organizing or discharging other debts making it easier to pay on the loan. 

As far as a remedy if there was wrong doing, again an attorney will have to examine the situation specifically but generally speaking it is very hard to get a house back after it is sold.  That said, there may be other remedies such as monetary damages that a home owner may have available.  Again, this is where advice from an attorney will be useful.