This is not legal or financial advice; I’m just sharing what I’ve learned as a real estate investor.
When dealing with bankruptcy (BK) and foreclosure, there are two main things to consider: the suggestion filed in state court and the petition for bankruptcy.
- Filing for Bankruptcy: The bankruptcy court has rules about how often people (known as debtors) can file for different types of bankruptcy (Chapter 11, 7, 13). Sometimes, a debtor doesn’t actually get a discharge, which means their bankruptcy case is dismissed. Because of this, they might file for bankruptcy more often than normally allowed.
- Court Actions: Often, the mortgage servicer or the party foreclosing will go to federal bankruptcy court and ask the judge to stop the debtor from filing more bankruptcies for a set time.
- Foreclosure and Bankruptcy: A person in foreclosure might file a suggestion without actually filing the full petition. If the court clerk notices this, they might allow the foreclosure sale to go through anyway. Judges might do the same.
- Buying Property in Foreclosure: If you’re looking to buy a property that has a suggestion or multiple suggestions, it could mean the seller is motivated!
