become trustee bankruptcy
Mortgage Deficiency and Bankruptcy Unsecured?
I have 2 properties, one rental and my personal residence. I fell behind on my rental property and the bank sued me. They obtained a judgment for 180k and the property is worth 120k. Before the sheriff’s sale I filed for Chapter 7 bankruptcy. I have 15k non-exempt equity in my house.
The bank has asked the court for a relief from stay and will eventually be able to sell the property at auction. I anticipate they will be at least 60k short.
My question is: Does this deficiency become part of the unsecured creditors in the Chapter 7 against which they will want the trustee to apply the 15k in equity that I have? I have no other unsecured debt.
Yes, but, only if your state allows it (some states prohibit collecting any deficiency from the party surrendering the house).
Do you have an attorney. You should be concerned about that 15k of non-exempt equity in your primary residence. Most bankruptcy attorneys would advise filing Ch 13 rather than Ch 7 if you want to keep your primary residence.
If you have a bankruptcy attorney, ask your bankruptcy attorney for details about your case. If you don’t have a bankruptcy attorney, I think you should seriously consider getting one. You may be in danger of losing assets that you don’t have to lose.
