Legal Question in Real Estate Law in Wisconsin

RE Real Estate Foreclosure Sale Occurring Before Sale Could Close, Bankruptcy Options to Stop Foreclosure Pending a Closing

Despite the fact that a real estate foreclosure may be pending, homeowners always have the right to stop the foreclosure process in order to permit a closing to occur by filing bankruptcy. Chapter 13 bankruptcies can even beused to force the bank to accept payments again, also stopping a foreclosure from occurring. However, even a chapter 7 bankruptcy, which normally only slows down a foreclosure by a few months, can stop it indefinitely if there is a valuable sales contract in place. Of course, the bank will need to be paid off via sale proceeds. However, any additional amounts produced by the sale (up to about $50 thousand net) will still go to the homeowner, despite the bankruptcy, if the homeowner is eligible for a homestead exemption. Even if the foreclosure sale has already occurred, it often remains possible to undo it in bankruptcy for up to 90 days following the sale if there is a viable purchase contract at a substantially higher price. On the other hand, merely having interested buyers will not stop a foreclosure. Many such "buyers" are simply interested in bidding on the home at the sheriff's sale rather than purchasing it from the owners and pretending to be interested in order to obtain information and better investigate their options; such potential buyers would never sign a sales contract Bidding wars at a foreclosure auction, however, are usually also good news for the homeowner since any amounts left over after all liens are paid go back to the homeowner. Please be aware that my general comments in this online forum are not intended as legal advice for you unless you subsequently retain me; you therefore need to consult with your own lawyer before acting upon any suggestions or other lawyer's views or comments.