Legal Question in Real Estate Law in California

Without knowing more about your bankruptcy, it is hard to say why they are doing this. It is very odd for a lender to continue with a trustees sale process after proper notice of a bankruptcy, because they can indeed get in serious trouble with the Bankruptcy Court. My first guess is that they have not been given proper notice. If they have not been served with proper written notice they may think they can proceed until they are. It is also possible that they know something you don't about your bankruptcy. Were you represented by counsel in filing it? Chapter 11 is pretty unusual for an individual to qualify for. There may be a defect in your filing and it may have been dismissed. If you don't have an attorney, there is a high likelyhood that Ch. 11 was not the right filing. If Ch. 11 was right, did they get relief from the automatic staty? Without being fully involved in your case it is just impossible to tell what's going on and why they believe they can proceed. If you have counsel, you need to ask them what is going on. If not, you need to get an attorney ASAP.

I know little about BK, but perhaps the lender is arguing that the trustee's sale is not part of any judicial action and they are permitted to proceed as secured debts are not subject to a bankruptcy filing. I have heard that that is an an incorrect interpretation and even a secured creditor must halt all action until they get an order of relief from stay.

I agree with the prior answers. There may be one or two other things to add. First, not all bankruptcies qualify for a long-term automatic stay; if you are a "serial filer" with more than one BK within certain time limits, you may get no automatic stay at all, or you may get only a short stay. Next, while a sale may not take place during the automatic stay, if the sale has already occurred, the lender or other buyer is not prevented from pursuing an unlawful detainer action to have you removed.

Most likely, however, are the following explanations, already mentioned in the prior answers: 1. The BK filing may be defective, or have been dismissed by the court for failure to file certain schedules; 2. The lender may have requested and been granted relief from the automatic stay; 3. The deed of trust may have been given by a different person than the one named as debtor in the BK case (have you changed your name); or 4. The foreclosing lender is not too bright.