Will I receive the proceeds after the sheriff sale if the house is in foreclosure? 17 Answers as of January 27, 2013

I filed chapter 7 and it was discharged in 2010. I included my house and didn't sign a reaffirmation.

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Law Office of Christian F. Paul
Law Office of Christian F. Paul | Christian F. Paul
If your house is sold in non-judicial foreclosure for failure to make mortgage payments, you won't owe the lender anythiing after the sale if the lender can't sell it for what you owe, but neither will you get anything if the lender is lucky and sells it for more. (This would be the case even if you had not had the debt discharged in bankrupcty.) If the house is worth more than what you owe, why not try to sell it now and keep the equity? Talk to your lender. Depending on what you owe and what it's worth, you might be able to make up some payments, sell the place, avoid the credit implications of foreclosure, and avoid the loss of equity. Good luck to you.
Answer Applies to: California
Replied: 1/27/2013
Stephens Gourley & Bywater | David A. Stephens
You will receive any excess proceeds. There are very rarely excess proceeds.
Answer Applies to: Nevada
Replied: 1/24/2013
Dan Wilson Bankruptcy
Dan Wilson Bankruptcy | Dan Wilson
If there are any surplus funds after all secured liens, property taxes, etc have been paid, you should receive the proceeds. But most foreclosure sales have no surplus. If you have any equity in the house sell it.
Answer Applies to: Colorado
Replied: 1/24/2013
Diefer Law Group, P.C.
Diefer Law Group, P.C. | Abel Fernandez
No, you should not get any proceeds from the sale. It should go to the loan company.
Answer Applies to: California
Replied: 1/23/2013
Ken Love Law | Kenneth Love
It is very unlikely that there will be any proceeds. When the house is sold, the mortgage must be paid, all costs of advertisement and the sale are paid, then any junior liens are paid, and finally the homeowner gets what is left. This only happens when a 3rd party buys the home. 9 times out of 10, the mortgage company bids what is owed on the mortgage and there are no other bidders. I would not expect any proceeds form a foreclosure sale. If you have a home with a ton of equity to need to see about selling it or getting legal help to hold off the foreclosure until you can.
Answer Applies to: North Carolina
Replied: 1/23/2013
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    When a foreclosure sale is held, the proceeds go first to the mortgage company to pay their lien. If any money is left over after paying all liens on the property, whether tax liens, HOA liens, or other expenses, then and only then you may get paid the proceeds that remain. But most auction buyers pay less than the amount of the mortgage lien, not more, so don't hold your breath waiting for a check. The fact that you have a $0 balance that you owe to the mortgage company doesn't mean that the balance on the lien went to $0 - to the contrary, every month that passed since you last paid your mortgage increased the balance of the mortgage lien by the amount of accrued interest, taxes and insurance the lender paid.
    Answer Applies to: Nevada
    Replied: 1/23/2013
    The Michigan Bankruptcy HQ
    The Michigan Bankruptcy HQ | Joseph P. Saulski
    If the house sells for greater than the amount owed on the house (and secured by the mortgage) then you will receive the excess. This is unlikely because you would have re-affirmed the loan if there was equity in the house in the first place. Although the bankruptcy discharged your obligations under the loan agreement, it did not strip of the lien (i.e., mortgage) that the bank had. Because you are in default and not paying, the bank is going to take the house by foreclosure and sell it. Because the law only allows the bank recover the amount owed to it and cost associated with the foreclosure, the home owner is entitled to anything beyond that (again, very unlikely).
    Answer Applies to: Michigan
    Replied: 1/23/2013
    The Troglin Firm | William M. Troglin
    Some states do a non-judicial foreclosure, which simply means there is no hearing before the sale. The lender runs a foreclosure ad for four consecutive weeks prior to the first Tuesday of the month which is the only day a foreclosure can take place. The sale is handled by the lender's attorney not the sheriff. The attorney handling the sale will make the first bid (which bid has been set by the lender) and if anyone makes a higher bid they have bought a house. If there is any money over and above the payoff and foreclosure expenses that amount would come to you but that is very rare. If nobody other than the lender bids then the lender is said to have bid the house in and now owns the home. Since you did not reaffirm the mortgage loan in the bankruptcy, you have no personal liability for money damages you simply lose the house.
    Answer Applies to: Georgia
    Replied: 1/23/2013
    Law Office of Norman Moore
    Law Office of Norman Moore | Norman P Moore Jr
    You will only receive proceeds from the sale of your foreclosed home if it is sold for more than what was owed on it. the likelihood of that happening is low.
    Answer Applies to: Wisconsin
    Replied: 1/23/2013
    Law Office of D.L. Drain, P.A.
    Law Office of D.L. Drain, P.A. | Diane L. Drain
    Only if allowed by the law of the state where your property is located. Your e-mail does not indicate where you live. Generally the only way the borrower receives any funds from a sheriff's sale is if all the secured liens and recorded judgments are paid in full first.
    Answer Applies to: Arizona
    Replied: 1/23/2013
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    No, not unless after costs and expenses it was sold for more than you owed. I would not expect any check. If the trustee had thought there was any chance of any money being made, they would have either left your bankruptcy open until the house was so sold so they could take the profits for your creditors or they would have taken control and sold the house themselves. Sorry!
    Answer Applies to: Michigan
    Replied: 1/23/2013
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If there is any equity left after the bank gets paid with all penalties and legal fees, then yes.
    Answer Applies to: New York
    Replied: 1/23/2013
    Reger Rizzo & Darnall LLP | Kathleen DeLacy
    You most likely will not receive the excess proceeds if it sells for more than the balance on the note and all costs. You need to file petition for the proceeds and you have to get a title search first to make sure no other liens, judgements, etc. Just because you discharged debts does not mean you are the rightful owner of any excess proceeds from a sheriff's sale. If there are liens, judgements, etc. on title search, when you file the petition with Superior Court for the excess proceeds you must send a copy of the petition to any lien holders or judgment creditors and also a notice of when the hearing will be held. Most likely they will object since there is a debt owed to them even if not by you.
    Answer Applies to: Delaware
    Replied: 1/23/2013
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    If there is a surplus, yes. The lender gets paid first as this is a secured loan. Bankrupt does not remove mortgage.
    Answer Applies to: California
    Replied: 1/23/2013
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    No. The proceeds of the foreclosure sale will go to pay the lien against the property. While your personal liability was extinguished in your bankruptcy, the lien against the house was not.
    Answer Applies to: Colorado
    Replied: 1/23/2013
    CPLS, PA | Evelyn J. Pabon Figueroa
    You should be able to receive the proceeds of the sale of the property. However, please keep in mind that each case is different and a full evaluation of your particular situation will be necessary to determine the effect of the sale and how the proceeds should be distributed.
    Answer Applies to: Florida
    Replied: 1/23/2013
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