Legal Question in Real Estate Law in Wisconsin

No, Chapter 7 bankruptcy rarely affects property titles in WI unless the Trustee is able to sell the property at a significant profit for the benefit of the unsecured creditors who he or she represents. If sold by the trustee, title will be transferred to the new owner, and can be delivered by the trustee "free and clear of all liens, with liens to revest in the proceeds." However, these days, in the current real estate market here, it is extremely rare for a bankrupt person to own property without major bank liens (mortgages), which would remove all potential profit to the trustee from the sale. In that event (or about 99% of all chapter 7 cases), the trustee simply waives (abandons) his interest when he files his "no asset report." This causes the title to revert to its status just before the bankruptcy was filed, without changing anything (that is, existing judgment liens, mortgage liens, etc. remain intact unless successfully attacked by the debtor's attorney before the bankruptcy is closed (usually 60 days after the initial meeting of creditors, aka, the "341 meeting). Of course, most such properties are also in foreclosure, meaning that the foreclosure picks up without missing a beat once the stay is lifted (Roughly 90-180 days after filing for chapter 7; Chapter 13, however, can maintain the stay for up to five years while the debtor catches up on the loan and usually stops foreclosures if all payments are made). My comments here are not legal advice, nor do they create an attorney client relationship between us; rather they are only for public educational purposes on this website. You are; however, always welcome to contact my office in Racine to discuss any additional questions which you may have. Answers may also contain advertising materials.