Question about foreclosure...case already closed

[jake24175]

Our case discharged on 12/16 and closed on 12/20 but our house (included in the bk) hasn't been sold yet.

Will our case be reopened for the auction?

The trustee declared it a 'no asset' case and requested to be released from her duties as trustee.

Lastly, my attorney said that the trustee probably won't go after our upcoming tax refund since it was declared no asset.

I've already asked about the latter part but any reassurances would be nice.

Please help.

[HopeinHorizon]

Depending on the state, foreclosures can take quite a long time to be finalized...

My state, for example is Ohio, and I work for a lender, one of our investor's gives us 12 months from Complaint being filed to sell, and transfer the property title back to them. Right now also depending on the county it can take months from the complaint to get a sheriff date set. In my county, there are dates for sale all the way into March for complaints filed in October-November range..

You won't be evicted (assuming that your still in the house) until after the sale, and in Ohio you have about 30 days from the time the attorney files a writ in the court to request your eviction.

As far as reopening a bankruptcy case, I doubt it, because the mortgage company cannot move and file in the courts for foreclosure action if the bankruptcy is still active unless they get relief.

[jake24175]

Depending on the state, foreclosures can take quite a long time to be finalized...

My state, for example is Ohio, and I work for a lender, one of our investor's gives us 12 months from Complaint being filed to sell, and transfer the property title back to them. Right now also depending on the county it can take months from the complaint to get a sheriff date set. In my county, there are dates for sale all the way into March for complaints filed in October-November range..

You won't be evicted (assuming that your still in the house) until after the sale, and in Ohio you have about 30 days from the time the attorney files a writ in the court to request your eviction.

As far as reopening a bankruptcy case, I doubt it, because the mortgage company cannot move and file in the courts for foreclosure action if the bankruptcy is still active unless they get relief.

I too live in Ohio. We surrendered the home in Chapter 7.

What is 'getting relief'? Is that from the stay?

The bankruptcy closed on December 20th.

Yes, I'm clueless.

[HopeinHorizon]

Yes, but if the case is closed, they will not need to file anything to get relief from the automatic stay.

Your in Ohio, so has the Complaint been filed for your foreclosure?

[HopeinHorizon]

Surrendering is fine, and by filing bankruptcy that will protect you from the lender coming after a deficiency balance when the home sells, but foreclosure is the legal process that a lender must take to regain title of the property, so you will still go through the whole process...

A deficiency balance exists when you owe say 80,000 and the home only sells for 60000 at auction... some lenders and investors come after the other 20,000 from you, but in your case it would be illegal for them to try to recoup those funds since it was included in bankruptcy..

Be careful though, they might send you a 1099 for the difference anyway and you might have to claim it on taxes as income, which could throw off your taxes. Not many lenders do that (mine doesn't) but there are some out there that really try to play hardball.. As far as I know anything discharged in bankruptcy should not be included as income for your taxes like a charge off, but some companies send them anyway.. I am sure Staci or another one of the gurus could help you out more with possible tax implications...

[StaciMM]

Foreclosure can be a long and complex process. Since the trustee signed off, I'm guessing there really isn't much of a chance that it will ultimately sell for more than you owed. The only way there would be $$ to go back to the trustee (to give some to creditors) if it brought enough to cover the costs of selling it, the amount of the mortgage balance, etc.

[StaciMM]

HopeInHorizon-

The 1099 would not apply to a debt discharged in BK. The deficiency balance was not 'forgiven' by the creditor, it was discharged by the court. Tax liability only becomes an issue on forgiven debt.

[jake24175]

Foreclosure can be a long and complex process. Since the trustee signed off, I'm guessing there really isn't much of a chance that it will ultimately sell for more than you owed. The only way there would be $$ to go back to the trustee (to give some to creditors) if it brought enough to cover the costs of selling it, the amount of the mortgage balance, etc.

They won't 're-open' my case when they have the auction...will they?

We included the total amount we owed for the home in the BK and the trustee already closed the case and was discharged from further duties.

I'm just afraid that they'll re-open it and take my tax return. I didn't sign anything saying I had to send her a copy of my tax return and my case was a 'no-asset'. I'm just guessing but if they wanted my taxes, they'd have declared it an asset case and kept it open.

Correct?

[StaciMM]

I think you are correct, Jake, about the tax returns.

Regarding your house-about how much did you owe, and how much was it worth? Last, what is your state's exemption amount? If it is not very likely to sell for enough to pay all of the above, plus selling costs, then there is nearly no chance that the sell will put money into the BK estate that the trustee could take so it would pointless for him to waste time following your case.

Keep in mind that in a foreclosure sale, the house will probably not bring its full value...

[jake24175]

I think you are correct, Jake, about the tax returns.

Regarding your house-about how much did you owe, and how much was it worth? Last, what is your state's exemption amount? If it is not very likely to sell for enough to pay all of the above, plus selling costs, then there is nearly no chance that the sell will put money into the BK estate that the trustee could take so it would pointless for him to waste time following your case.

Keep in mind that in a foreclosure sale, the house will probably not bring its full value...

We owed $66,000 on the house and that was the amount listed in the Bk. I'd imagine that the house will sell for around $28,000 at the auction. Our attorney said to list the full amount rather than the expected sale price so that we wouldn't owe anything after the sale.

I appreciate all the help you've given me, it's truly a blessing.

[StaciMM]

If there is no chance that the house will sell for enough to cover your mortgage, then there is nothing in it for the trustee. Sounds like you are good!

[jake24175]

I noticed on Pacer that our Trustee puts a page in the 'documents' area for tax returns she plans on administering.

For those who have questions regarding their return, they might want to look at some previous/same time cases by their trustee.

The trustee also listed those cases as 'asset' cases.

Hope this helps someone.