Expert: Terry Leeders - 6/27/2007

Question
QUESTION: I am a investor/loan officer in Georgia. I generally deal with REO's,but an old client is facing forclosure in less than 7 days. He is considering Chapter 7 to save the home, which is an investment property. I plan to short sale the property, but I fear I won't have enough time.
My question is, what are my options (or client's) after BK is established?

jaz

ANSWER: Chapter 7 will only temporarily stop the action until the mortgage company moves to modify the automatic stay.

---------- FOLLOW-UP ----------

QUESTION: Could you explain "automatic stay"? Also, if after the bankruptcy, the client gives the trustee "a notice of abandonement", am I allow to do a short sale through the trustee?


Jaz

Answer
The automatic stay is the debtors protection from creditors.   You would need to petition the court to allow the debtor to sell the real estate, if there is no equity for the trustee to go after.  The chapter 7 lasts 90 days, so most wait until it is over.   The standard notice for permission to sell is 20 days.