Bankruptcy Dismissal


#1

If an “Order Dismissing Chapter 13 Case” has been filed, is it be safe to purchase the property at auction? I don’t want the trustee sale to be overturned after purchase. I guess the better question to ask is how does the trustee view a filed case dismissal? Are they comfortable going ahead with the sale? Should auction investors wait until you see “Bankruptcy Case Closed” or an “Order Granting Motion for Relief from Stay” on PACER before purchasing?

For the armchair lawyers: Case was filed in California (CANBKE).


#2

No active BK = No Automatic Stay, I have followed these and what happens with the foreclosure does not seem to have any logic. You can dig through the BK files and learn a lot about the trustor. I would also pay attention to why the case was dismissed. People who file BK to delay or avoid foreclosure will sometimes try other methods to remain in possession.


#3

Case Closed does not mean you will not have problems later. If the judge grants an order to “Dismiss” then the bankrupcy is over. There are other things a person can do to tie the property up after they are evicted from the property. I know of a man (he has a bad history as a slumb lord) who filed a lawsuit against the bank claiming they committed fraud. He is not back in the house, and can not return to the house during these legal proceedings, but after the two years it took to evict him (during which time he paid no payments on the property), he has now tied the house up again for another year and counting. The whole process can be very drawn out and complicated. If the bank had sold the property then the new owner would have the right to live in the house. It is unlikley the evicted party will prevail in court, and I read his court documets it appears he just want more money from the bank–he’s trying to claim fraud, emotional distress and any thing else he can get away with. The judge after about 6 months did drop that part of his claims. Now what’s left is his claim that the assignments (selling of mortgage note) was illegal. Good luck with your forclosure research.