Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
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If your question is "Should (you) be concerned regarding clear rights to the property??" The answer is clearly "yes".
My guess, without doing more fact finding, etc. which we can't do on here, is that you are going to have a problem getting a clear title.
I did see the attachment, which is what I assume you are referring to, but if that is a condo doc it doesn't really apply/override the laws re: foreclosures, bankruptcies, notice, etc.
You have A LOT of issues involved in this case. FOr instance, a bankruptcy automatically prevents a sale from being made even if the seller wasn't aware of the bankruptcy. However, there is some duty to timely notify everyone of the ownership of the property either by filing something in the county deed records or by actually sending notice to whoever would be involved. Filing something in the county deed records serves as "notice to the world" but the bankruptcy court may have issued a notice to the newspapers, etc. which also serves as notice.
What you probably want to do is hire a lawyer that does either Civil Litigation or Real Estate and then have them contact the local title insurance company and see what they will need to provide a clear title if you get ready to sell the property. Without a clear title the property really has no value.
You probably want to talk to the title company without the lawyer then early Monday so you can decide whether or not to move forward. Normally a sale like this wipes out the debt before it but with the bankruptcy the same rules don't apply and it is very fact intensive.
The county may even be willing to let you have a little more time to investigate, all you need is a couple of days and then you will know for sure.
I agree with that assessment regarding you likely being able to live in it and then likely will have problems selling it.
However, if the bankruptcy court had issued the stay then the sale wasn't a valid sale since the county lost jurisdiction over the property at least temporarily. If the county was owed any money then that wouldn't have been likely to have been "wiped out" by the bankruptcy (although it isn't 100% certain) but if they were just conducting the sale then things changed again.
You almost certainly wouldn't be able to sell it and you couldn't get it refinanced or use it as collateral since you can't get title insurance. There usually is a way around it, just not one that you can discover in the first few hours of Monday.
Yes, that's another reason it is confusing. There is also some case law which states that even if a person isn't a party to the bankruptcy, if they know of it and know of the stay then they are bound by the stay issued by the court. I believe in that case they were held in contempt for not obeying the court's stay.
Based solely on the info and facts provided in this exchange you are not wrong in that assessment. However, the stay issued by the bankruptcy court would mean that the sale/auction likely wasn't valid.
I can't answer as to what the county will do. I think they should issue the title, and then if the other people involved want to "fight it out" they should do so in the courts. However, I'm not sure that the county can actually do what they are supposed to do effectively since the auction/sale took place at a time when they were aware a bankruptcy had been filed. I've seen similar cases before and the auctions/sales were declared void but there weren't as many entities involved and the timing was different. Bankruptcy judges are extremely protective of their right to issue stays and have people follow them.
I think you are going to come out of this fine, and likely with the property but it may take some work ahead of time and you will likely have to hire a lawyer and then get reimbursed by someone.
You may very well be right. This is one of those rare cases in which there is just not a clear answer because there are so many variables in place. Usually in a case like that then the judge does the equitable (fair) thing which would be to award you the property with a clear title and to have someone, possibly the county, bear the brunt of the fees, etc.
What they should have done is just postpone the auction and asked the judge to lift the stay as to them.
I think that is a safe assumption. However, what I am worried about is that they will issue a certificate of sale that isn't going to be recognized by the title companies later.
I'm sure it is suitable for that but that is a lot of money to tie up in something that you wouldn't be able to resale later.
A lawyer should be able to get it sorted out for you though, and the fees reimbursed to you by someone else.
Probably, but you still have the statute of limitations to deal with and you don't want it to expire. You probably want to go ahead and visit with the lawyers and get a course of action in mind.
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