Legal Question in Bankruptcy in Georgia

Mortgage Question regarding Bankruptcy

When a home goes into foreclosure and bankruptcy, if the is both a first and a second on the home how does the sale proceeds get split or do they get split or what happens?


Asked on 7/08/06, 12:06 pm

2 Answers from Attorneys
Scott Riddle Law Office of Scott B. Riddle, LLC

Re: Mortgage Question regarding Bankruptcy

The proceeds get distributed under state law, in order of priority of the security deeds, or other liens. If there is anything left (which is not normally the case), it goes to the debtor or the trustee, depending on the debtor's exemptions.

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Answered on 7/08/06, 12:14 pm
Glen Ashman Ashman Law Office also dba Glen Ashman Attorney

Re: Mortgage Question regarding Bankruptcy

No one can fully answer your question as posted. While 1st mortgage holders come ahead of 2nd mortgages, if a 2nd mortgage holder forecloses they may in some cases get paid (although they must first make sure the 1st mortgage holder has been paid off). If the 1st mortgage holder forecloses, the 2nd mortgage holder may end up with 0. If the bankruptcy court trustee does a sale, the 1st gets paid in full before the 2nd IF the 1st is fully secured.

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Answered on 7/08/06, 1:27 pm


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