Q: I bought a property at a trustee’s sale. The occupant claims that he is in bankruptcy, but the trustee says that they were allowed to conduct the sale. What does this mean for me?

A: This type of situation is common and usually requires you to start doing some research. If a person is in bankruptcy, no person can sue them or take action against them until they get a “lift stay order’ from the bankruptcy court. Therefore, if a person is losing their house to foreclosure, they often file bankruptcy to delay the sale. The bank then pursues a lift stay order allowing them to conduct the sale unless certain payments are made. In this case, it sounds like the bank likely did obtain a lift stay order and therefore the sale is valid. You need to check the bankruptcy court records to confirm this. The discussion doesn’t stop there though. Just because the bank was allowed to complete the foreclosure sale, doesn’t mean you can automatically pursue the eviction. If the occupant is still in bankruptcy, and you weren’t covered by the bank’s lift stay motion, you likely have to go to the bankruptcy court to get a lift stay order allowing you to do an eviction. You can’t just file the eviction like normal because the occupant is in bankruptcy.

Mark B. Zinman, Williams, Zinman & Parham P.C

Information contained in this article is for informational purposes only and should not be considered legal advice. You should always contact an attorney for legal advice and not rely on information published here.