Does suggestion of bankruptcy always stop a foreclosure sale?

[Evan Gater]

Hello,

I very often see "Suggestion of Bankruptcies" in foreclosure case dockets. While some are in good faith, it seems that some are intended to delay the sale as much as possible. Sometimes, there are multiple suggestions of bankruptcy in the dockets.

I am new to buying foreclosed properties. When I see a last-minute suggestion of bankruptcy in a docket, I avoid bidding on that property because I assume that the foreclosure sale will be canceled, even if it initially proceeds. Is this assumption correct? Can a judge still proceed with the foreclosure sale even if the defendant has filed a suggestion of bankruptcy? Can the homeowner repeatedly file last-minute suggestions of bankruptcy to indefinitely stop the foreclosure sale? Is there a limit to the number of suggestions of bankruptcy that a homeowner can file? Is there any way to know if the judge would reject the cancelation of the sale after a suggestion of bankruptcy? Do you also avoid bidding on properties with suggestions of bankruptcy?

Thanks in advance,

[Chris Seveney]

Quote from @Evan Gater:

Hello,

I very often see "Suggestion of Bankruptcies" in foreclosure case dockets. While some are in good faith, it seems that some are intended to delay the sale as much as possible. Sometimes, there are multiple suggestions of bankruptcy in the dockets.

I am new to buying foreclosed properties. When I see a last-minute suggestion of bankruptcy in a docket, I avoid bidding on that property because I assume that the foreclosure sale will be canceled, even if it initially proceeds. Is this assumption correct? Can a judge still proceed with the foreclosure sale even if the defendant has filed a suggestion of bankruptcy? Can the homeowner repeatedly file last-minute suggestions of bankruptcy to indefinitely stop the foreclosure sale? Is there a limit to the number of suggestions of bankruptcy that a homeowner can file? Is there any way to know if the judge would reject the cancelation of the sale after a suggestion of bankruptcy? Do you also avoid bidding on properties with suggestions of bankruptcy?

Thanks in advance,

 As a lender, when a borrower suggests bankruptcy we do not stop the sale unless they file bankruptcy. In many instances a bankruptcy is the best outcome for everyone as it keeps the borrower in their home while reorganizing their debts. 

Yes a judge can still proceed with the sale even with a suggestion of BK and the only way a judge can stop it typically is if the borrower files a temporary restraining order, which lasts 15-30 days and must be a valid reason - the reason of "I am going to file BK" is not a valid reason to give a TRO as the borrower can file BK and then has time to complete submitting their plan.