What is a Bankruptcy Auction?
You hear about them all the time – auctions that allow people to bid on items like homes, cars, and other valuables, and get them at rock bottom prices after they are seized from their original owners. Bankruptcy auctions are a great way to get a bargain, but they can be devastating if it is your possessions being auctioned. If you are considering bankruptcy, what should you know about bankruptcy auctions?
Chapter 7 bankruptcy is a liquidation of debt. It makes it possible for people to eliminate their debt and get a fresh financial start, but it also requires debtors sacrifice a number of their possessions. Assets are often liquidated through auction and the proceeds are paid to creditors. Most often the possessions sold at auction include houses, vehicles, and boats, but just about anything can be sold at auction.
How are Auctions and Foreclosure Sales Different?
Foreclosure sales and auctions are similar. The goal is to raise the cash needed to pay creditors, but in the case of a foreclosure, it is the bank or mortgage holder of the house that receives the money made from the auction. In some states, if a home sells at foreclosure auction for less than its value, the bank can sue the foreclosed upon homeowner for the difference.
It should be noted that foreclosure auctions are rare. Typically when a person chooses Chapter 7 bankruptcy, he or she does not have many assets, and any he or she does have are exempted from the bankruptcy and not sold. To learn more about the basics of Chapter 7 bankruptcy, visit the website for US Bankruptcy Court.
The majority of the time when you see an auction, it is not related to a person filing for bankruptcy. Foreclosure sales, on the other hand, are quite common and have resulted in homebuyers finding great deals on bank-owned homes.
What Should You Do If You are Facing the Possibility of a Bankruptcy Auction?
If you are struggling with finances and you are concerned your possessions could be sold at auction, you need to seek assistance as soon as possible. Chances are a bankruptcy expert can help you file without sacrificing ownership of your possessions – at least most of them. Depending on the type of bankruptcy you choose, you might lose your home or your vehicle, but even these items can be protected if you seek appropriate guidance and act in a timely manner.
If you would like to know more about bankruptcy auctions or you would like to speak to someone about bankruptcy, we can help. Contact the Law Offices of Robert M. Geller at 813.254.5696 to discuss your situation.