Defendant Filed Bankruptcg After Sheriff Sale

2 Replies

So I won a property on July 2 at a mortgage foreclosure Sheriff sale auction. We paid 10% of our down payment immediately after winning the bid and were given 30 days to pay the rest. Recently, we got a letter in the mail saying on July 3(a day after the sheriff sale), the defendant contacted them to advise that she had filed for bankruptcy protection. They performed a docket search and confirmed the bankruptcy filing which occurred on July 1. And additionally said please reverse the sale. It’s my first time winning a bid and I’m really confused about this. Does anyone have an idea what exactly is going on? Am I still going to get the property that I won already or any advice of what to do next?

More than likely not. You'll get your money back but, the sale will be invalidated based on what you wrote. they filed before the sale and apparently no one did a a date down before the sale so, it will be unwound. Depending on the type of BK, they could surrender it and you could get another chance to buy it or, they could put it in their plan to reinstate (if they filed a 13). Shame on the auctioneer/trustee for not verifying before sale. That information would be known if they looked.