Re: Can a foreclosure be filed without lifting stay?

More | Report Post

On 10/07/04, Aunt Mary wrote:
> We live in Florida and filed chapter seven pro se in March
> and notified all creditors including our Home Owner's
> Association. We had a creditor's meeting and no creditors
> showed up and the bankruptcy is still in effect. Today we
> received notice that our Homeowner's Association has filed
> foreclosure for the amount of $1900 (for a $120 debt) Am I
> wrong that no one can file a foreclosure or attempt any
> debt collection while the bankruptcy is ongoing and that
> they have to ask permission of the Bankruptcy court to
> proceed? I found a case in which a Florida man filed suit
> against a bank for foreclosing during a bankruptcy stay and
> he won damages. The HOA knows we are in bankruptcy and even
> tacked on a bankruptcy fee to the foreclosure. Are they
> exempt from having to ask the Court to lift the stay? I
> have just been awarded back-payments from Social Security
> and my Social Security attorney says I will receive the
> check any day now so I will be able to pay any legitimate
> debt. Any advice will be appreciated. Aunt Mary

Aunt Mary,

Are you sure that the BR is still pending (no discharge) or
that no motion for relief from stay was filed by the
homeowners association? Was the homeowners association
listed as a creditor in your petition? Have you been
receiving all of the notices from the court in the mail? A
competent BR attorney would be able to answer these questions
and would have been able to guide you through the problems as
well as keep up with the motions as they were filed through
the electronic court filings. Does your homeowners
association agreement provide for a secured interest in your
real estate if assoc. dues are not paid (lien rights)? Or is
it that your mortgage is held by the homeowners association
such that they are a secured lender? If they are a secured
lender, did you reaffirm the debt during the course of the
BR? Secured lenders have greater rights throughout the
course of a BR than unsecured lenders. There are also
different levels of priority for creditors. If a mortgage
lender is deemed to be secured and the debtor is discharded
without re-affirmation and cure of the amount in arrears,
then a secured lender may go forward with foreclosure after
the BR. If the BR is still pending, the creditor received
notice of the BR and the Homeowners asociation is deemed an
unsecured lender then it would seem to me that they are in
violation of the automatic stay and a motion for sanctions
would be in order. In any event you probably need to consult
an attorney, he should know what motions were filed with the
court, who received notice and what to do. Acting pro se in
the Federal BR Ct is not a good way to go. The requirements
of electronic filing and the complex nature of the BR laws
make a competent attorney well worth the fee, as situations
such as the one you are presented with can be analyzed before
the BR is filed and contact with the creditors can be
facilitated through the attorney.