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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2890
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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this might show up as a duplicate, as the form reset when i

Customer Question

this might show up as a duplicate, as the form reset when i hit submit.

I am in a chapter 13 bankruptcy in which I am under pressure to be converted to a chapter 11, but the reality is I really don't need to be in bankruptcy at all.

what is going on is ,I have an ownership interest in a property, and that propertywas set to go to foreclosure sale, and so I filed chapter 13 in order to prevent the sale.

despite the bank and foreclosure trustee being noticed before the trustee sale of the bankruptcy they violated the stay and went ahead with the auction and it was purchased by a 3 rd party.

i shouldadd a couple small additional points.

Back on January 2 property was scheduled for trustee sale but because of our raising of several issues the lender rescinded the notice of sale ,specifically ,and this is a direct quote from the rescission of the notice of trustee sale document,

5.) THAT THE TRUSTEE has been infomed by the Beneficiary that the Beneficiary desires to rescind the Notice of Trustee’s Sale, which was recorded inadvertently due to a failure to communicate timely notice of conditions which would have warranted a cessation of foreclosure proceedings;

nothing changed but then on February 14 they recorded a new notice of sale but did not notice anybody occupying the property nor myslef, a lienholder and ultimately the property was purchased for 2.6 million by third-party who immediately had it on the market and in escrow for 4.5 million not less than a week later.

I filed an adversary proceeding complaint askign for recision of the sale , and punitive damages, and the judge has initially granted our preliminary injunction preventing the third party from selling the property, and has in open court declared that the sale is void but has allowed for one more hearing on the matter next month .

it might be harmful for me to stay in the bankruptcy so iam wondering if i can withdraw from Chapter 13 case and still persist with the adversary proceeding? Or what is the route that I could take back which would allow me to get out of bankruptcy but still pursue the issues ?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 4 years ago.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

You, as the debtor can voluntarily dismiss the case at any time on motion.

Terry L. :

With it though, go your adversaries, as they get dismissed too.

Terry L. :

That puts you back on pre-bankruptcy ground, without the automatic stay protection.

Terry L. :

The lender can then move to finish up the foreclosure.

Terry L. :

Staying in the bankruptcy preserves your adversary issues.

Terry L. :

Let me know if you have any other questions

Terry L. :

thanks

Terry L. :

Terry

Customer : So I have to stay in BK Long enough till their is a ruling on the matter concerning the violation of the stay? I thought that since their is a violation of law, that occurred that the case would still go fwd? Let me reiterate, the Bk was file before the truste sale, so what should happen is that the sale is rendered void because the stay was in effect, and title should be restored back to the status quo. I understand that the bank could post a new sale etc, but i would think that ther would still be consequences for breaking the law and protections from thos. actions that would still need to be resolved ? If I falsified docs they could dismiss my case and then actions void be brought agains me, so does a creditor get away with it?
Terry L. :

when the underlying bankruptcy is dismissed, so goes all matters with the case, the judge has no authority to rule on those matters, so you should keep the case open until that is resolved before dismissing if you wish to get some type of punative damages for the violation

Terry L. :

Did you have any further information?

Terry L. :

any more questions

Terry L. :

let me know. If not,please click accept to close the question.

Terry L. :

thanks and good luck!

Terry L. :

It's been a week, did you have any followup questions? If not, please click accept to close the question. Thanks and Good Luck! Terry