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NEED help with SCHEDULE D

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    NEED help with SCHEDULE D

    On Schedule D (Creditors Holding Secured Claims):

    If a homestead is sold at a foreclosure sale recently and there is a deficiency due, it can be listed in a chapter 7 bankruptcy since it was a prepetition transfer and the trustee can attempt to recover it. HOWEVER!
    Would it be listed in Schedule D or only in the Statement of Financial Affairs? I am guessing Schd D beucase it is a liability, but others disagree. Please help. Thanks.

    #2
    That is an interesting question.

    In many States, the Lender, or whoever buys the house at the Foreclosure Auction, does not automatically own the property. Many States have a Redemption period that allows the debtor to "buy back" the house.

    Technically, until the Redemption period ends and the Lender completes the En Rem process, a Foreclosed property still legally belongs to the Debtor. As in name on the Deed/Title. Liability for the property. Anyone slips and falls, you better have insurance coverage.

    But where in the Schedules to list the debt??!!

    That's a very good question.

    We haven't filed BK yet. We just went thru Foreclosure, but we had a last minute offer. We were able to dodge Foreclosure. Our house is sold and closed. So I have no clue where our attny was going to list the deficient balance.
    Filed Ch 7 - 09/06
    Discharged - 12/2006
    Officially Declared No Asset - 03/2007
    Closed - 04/2007

    I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

    Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

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