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  1. #1
    Join Date
    Feb 2010
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    2

    Default Sheriff's Sale After Chapter 7 Bankruptcy

    My question(s) involves a foreclosure in the State of: Michigan

    I am behind on my mortgage and am unable to work out any payment arrangements with my bank.

    I received a discharge in a ch. 7 bankruptcy in 9/09. I did not reaffirm any debt.

    1. If I let the home go to Sheriff’s Sale, can the bank sue me for the deficiency (since the debt was discharged in bankruptcy)?

    2. If #1 is no - Can I redeem it for the price it sells for at the Sheriff's Sale (which I am assuming will be lower than my actual balance) without any liability for the deficiency?

    3. Will the bank just bid higher at the sale to make sure they recoup more of their losses (i.e. bid up to what they want for the property when they actually sell it to keep me from doing a short sale and profiting the difference)?

    I desperately want to keep my home, what are my options?

    Thank You

  2. #2
    Join Date
    Sep 2005
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    Behind a Desk
    Posts
    98,846

    Default Re: Sheriff's Sale After Chapter 7 Bankruptcy

    Odds are that the bank will appear at the sale, bid the amount of the note, and be very happy if somebody outbids them. You should not anticipate that the house will sell to a third party for less than the amount of the note, although that has the saving grace (even without the bankruptcy) of wiping out the deficiency. A deficiency judgment is most likely if more than one lender is involved (e.g., a second mortgage lender who is wiped out).

  3. #3
    Join Date
    Feb 2010
    Posts
    2

    Default Re: Sheriff's Sale After Chapter 7 Bankruptcy

    Thank you very much for the reply.

    So the bank will most likely bid the amount of the note, even if it is much higher the FMV?

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