Bidding at Florida Foreclosure Auctions can be exhilirating. Foreclosure sales give you the opportunity to purchase Florida real estate at far less than market value. Competition can be fierce, but there are less people who can pay cash than through traditional mortgage lending, which can give you a leg up in building and growing your real estate empire.
There are actions that can bring a Florida foreclosure sale to a grinding halt, and few as powerfully as the "last minute" bankruptcy filing. As an experienced Florida foreclosure bidder attorney, I can share with you that debtors filing last minute bankruptcies to delay a foreclosure sale happens more often than you think.
What is a "last minute" bankruptcy? This is when the occupant, debtor, or debtor's spouse file a petition for bankruptcy relief in the Federal court nearest to them on the day of the foreclosure sale or the day prior to the foreclosure sale.
But, a Final Judgment of Foreclosure was entered, why does a bankruptcy affect a foreclosure sale? Federal bankruptcy relief triggers an automatic stay (a forced PAUSE) of all actions against the person or the property of the person who filed for the protection. Federal law is superior to the Florida foreclosure judgment.
What if my sale went through after they filed for bankruptcy? Under Federal law, your foreclosure bid is void (legally did not happen) if this is the first bankruptcy the person delaying the case has filed. For two or more bankruptcy filings by the same person in a 12 months period, there are different mechanics involved.
Will I automatically get my money back if the sale is void because someone filed for bankruptcy? No. You must petition the court to return the money you bid and deposited with the Clerk of Court. These petitions to get your money back must generally be set for hearing. The Clerk will not return any money without a Court Order. Remember that if you bid at the auction via your LLC or Corporation you cannot make any filings on behalf of your company, a Florida lawyer must represent the company.
Are there any times that the sale will be valid after someone files for bankruptcy? Yes, but it often requires petitions and orders from the Federal Bankruptcy Court confirming that the sale did not violate the automatic stay. Remember that if you bid at the auction via your LLC or Corporation you cannot make any filings in Bankruptcy on behalf of your company, a lawyer admitted to that Federal Bankruptcy Court must represent the company.
How often can it take to get my money back from the foreclosure sale or to confirm a sale when there is a last-minute bankruptcy filing? It can take anywhere from 4 to 9 months, especially if you need relief from the Bankruptcy court.
Our attorney Natalia Ouellette-Grice is admitted to the Middle District of Florida Federal Bankruptcy Court and an experienced foreclosure bidder attorney.
If someone filed for bankruptcy at the last minute in the Florida Foreclosure Auction where you were the winning bidder, email Natalia@lcolawfl.com as soon as possible. Remember, Clerks and Judges will not automatically confirm the sale nor automatically return your money.
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