Effect of Chapter 13- BK on Property Foreclosed On by HOA
I have a potential client who was had her home foreclosed on by her HOA. The property went to sale 01/26/06. She filed BK on 07/26/06, the last day of the redemption period because she was unable to redeem the property. She is under the protection of the bk stay right now. Instead of proceeding to judgement on the bk, she would like to sell the property to my company so that she can be completely out from under this obligation. Can she sign a warranty deed to trustee under a land trust while she is in bk (prior to any discharge)? Is there any law in MN that prevents a person in chapter 13 bk from selling their property? Please advise.
1 Answer from Attorneys
Re: Effect of Chapter 13- BK on Property Foreclosed On by HOA
Your potential client should take this question to her bankruptcy lawyer.
That said, here's what I think you have. My understanding has always been that whether it's a 7 or a 13 the bankruptcy only catches the property and prevents completion of foreclsure if it is filed prior to the foreclosure sale. Anything after that is too late. Ownership transfers at the time of the foreclosure sale. Then all your potential client has is a right of redemption, which she either uses or doesn't use. Filing a bankruptcy does not affect the redemption right one way or another.