Trustee Sale Delay Vs Bankruptcy 101

Trustee Sale Delay Vs Bankruptcy 101


It is well known that edges are illegally foreclosing on homeowners in Trustee States since the foreclosure course of action is lightly observed by government agencies. In Judicial Foreclosure states, a estimate reviews the legality of the foreclosure proceedings to ensure the homeowner is being protected against greedy lenders and however nevertheless the lenders are not properly following the foreclosure laws correctly. In Trustee States, lenders use a “third party” trustee company to replace the legal function of a estimate and orchestrate the foreclosure course of action. If edges are not legally foreclosing when they know a estimate reviews the case what do you think they are doing when they only have to go by a trustee that they pay?

By having the trustee verify a comprehensive list of issues related to the legal character of the foreclosure proceedings enacted by the lender, which as a byproduct, the homeowner can nevertheless retain complete ownership of the character and live there comfortably. Since the trustee assumes the liability in auctioning the character, they will not foreclose on the character if there is a possible violation pointed out to them prior to the Auction Sale Date as they could confront sanctions and ultimately lose their license. Trustees are incredibly busy and generating huge profits so they will continually postpone the sale date with adequate time to research and respond to the issues raised by our company to protect themselves.

Here are few examples of Red Flags:

  • Lender is nevertheless foreclosing already though the owners want to give the character back.
  • Lenders accepting funds or making deals, from the character owners, during a foreclosure action.
  • Lenders answering demands and pay off letters from escrow or mortgage companies.
  • Lenders ignoring trusts deeds recorded prior to the loan, delinquent character taxes or insurance policies.
  • Lenders ignoring letters sent by the owner of the character.
  • Lenders providing information regarding the character owner to unauthorized persons.
  • Lenders not providing the Trustee Company with true and accurate information.
  • Bankruptcy filings



edges are very aware that many homeowners are filing Chapter 7 Bankruptcy to delay their foreclosure. When filed, a Ch 7 will put an automatic Stay on all of your debts. That method that no creditors can proceed with debt collection. consequently, closest after the bank is notified of the filing they send their legal team to court to file a motion to lift the stay. Most edges are doing this so fast that the stay only keeps the homeowner in their house a few months. As soon as the stay is lifted, your house is back on the auction block and you now have a bankruptcy on your record.


Similar to Chapter 7, when a Chapter 13 is filed it will stop creditors from collecting debts closest. The difference is that Chapter 13s are the reorganization of debts. This will buy the homeowner a few more months, but the edges will nevertheless file a motion to lift the stay. Homeowners who are this delinquent are at a disadvantage in court against a valid creditor who has not been paid in an excessive amount of time. Again, as soon as the stay is lifted your house is back on the auction block and you now have a bankruptcy on your record.


6 months 15 days is the fastest any homeowner has lost their house in this program with the longest being 3 years and 4 months. You will not have a bankruptcy on your record and can nevertheless work out a alteration or short sale while in the program. It’s not cheap, but it’s way cheaper than the different of having the home sold out from underneath us before a sale or a non-deficiency agreement with the lenders was completed (for a short sale).



Filing any kind of bankruptcy will have very strong consequences. Homeowners who file just to prolong the sale of their house disqualify from filing again for 7 years (in a Ch. 7). consequently, you are unprotected for that complete period. What happens if there is some medical emergency that incurs tremendous bills? You will not be able to protect yourself against getting your wages garnished. No matter what the debt or situation, you are no longer allowed to protect yourself because you used your ‘free pass’ on your foreclosure, which could have been handled much differently.Also, many companies pull credit and might not hire a candidate with a Bankruptcy on their record. In today’s job market, can anyone provide such a big disadvantage?

Trustee Sale Challenge:

While challenging your trustee, you are likely to be getting revolving mortgage lates until a solution has taken place, whether it is foreclosure, short sale, fair market sale, alteration or reinstatement.



Chapter 7 Bankruptcy wipes the slate clean for people who qualify (qualifying for a BK is now tougher than ever). When approved, most debts can be released. This is a good choice for homeowners with a lot of unsecured debt (credit cards, personal loans…). Your mortgage is secured by your home, meaning that already after bankruptcy is filed they can nevertheless take your character. So the financial benefits only include removing unsecured debt.


Chapter 13 is reorganization of debts. The estimate is going to work with yourself and your creditors to plan out an permissible repayment plan to all of them. Often the character will be removed from the BK as the delinquency is extreme and it is a secured loan. This is not a great option for homeowners looking to buy time.


While you are employing a Trustee Sale Challenge to verify the legality of your foreclosure proceedings, you live in your house for a fraction of what your mortgage or rent would be. During this time you can save money to buy another place in the future. You can get into a debt settlement program and remove all of your unsecured debts without filing bankruptcy. It is your savings to do with what you please. This won’t stop an eventual sale though, just delay it for months.

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