foreclosure
we have been trying to sell our property, as we have seroius debt and employment for my husband has ended. Now we are over 96 days in arrears on the mortgage. The mortgage company is sending a demand letter, can we apply for bankruptcy protection once legal action has commenced on our property? if by chance the house sells during the beginning of the bankruptcy process, will we be responisable for the any outstanding monies post sale?
Posted from: British Columbia
As long as the house has been forclosed on prior to the date you filed bankruptcy then any shortfall you will be protected from. The key is that the “act of default,” which is essentially the date you stopped making payments and informed the bank to forclose or the date of forclosure itself must be prior to bankruptcy.
From the sounds of it this has already occurred so I would suggest it is probably the appropriate time to sit down with a local trustee and get things started.