In a chapter 7 Trustee sale: can a lender, after granting the Chapter 7 Trustee an Extension of the sale date, Foreclose on the property? The lender (GMAC) granted the chapter 7 trustee a 30 day extension from the sale date 12/15/10 to 1/15/11 but sold the property on 12/15/10. This extension was given to the chapter 7 Trustee's attorney in writing. My property is undergoing renovation by the purchaser to be flipped. The value of the property is around $520,000 (per zillow) and was sold for $366,000, a loss of over $150,000 to me.
1 Answer from Attorneys
You'll have to forgive me, but maybe I'm not understanding your question. It sounds as if the Debtor (which I'm assuming is you, but perhaps I'm mistaken), is in a Chapter 7 bankruptcy.
Where there might be some confusion is in the use of the term trustee. The trustee in a trustee sale is different than the Chapter 7 Trustee. So, regarding the extension, do you mean that they postponed a scheduled trustee sale because of the bankruptcy filing? OR, do you mean that the Chapter 7 Trustee was going to sell the property for the benefit of the bankruptcy estate? This would only happen if the property had excess equity, which does not appear to be the case.
Assuming that a bankruptcy was filed prior to the sale date, the lender could not sell the property unless they had gotten permission from the Bankruptcy Court which is done by filing a Motion For Relief From Stay. I don't know if this was the case in your circumstances, and I apologize if I misunderstood your question. Feel free to give me a ring if you'd like, as we're right down the freeway from you.
TODD MANNIS, ESQ.
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