You filed for Chapter 7 bankruptcy earlier in the year and included your home since you owed substantially more than its now worth. You are still occupying the home and are now wondering if you can buy your own house back at the foreclosure auction. You have the money, but aren’t sure about the taxes and fees associated with your previous ownership/potential “renewed” ownership through auction.
If the above scenario fits your situation, you are in the minority. Most homeowners who include their home in their bankruptcy do not have the funds to buy it back at auction after the fact. If you are in this position, you should definitely consult with some experienced in purchasing properties at foreclosure auctions. It’s a straightforward process, but every county and state has different procedures and knowing exactly what to expect will be invaluable to you during the bidding process.
Simple Facts to Remember:
- The highest bid wins.
- If you provide the winning bid, you must provide the funds to the individual or company hosting the auction immediately. (You must show proof of funds before even being allowed to bid).
- If you provide the winning bid and buy back your foreclosed home at auction, you will need to find out the total of the delinquent property taxes. (These transfer with property ownership and are not wiped out by bankruptcy).
- In some cases, the mortgage lender has already paid the past due property taxes or they have been included in the purchase price of the property at auction. You can confirm this with the county tax assessor’s office.
- If you attempt to buy back your home after bankruptcy at the foreclosure auction and you do not have the winning bid, you will still have some time to move out. The new owner typically doesn’t want to waste money evicting the current resident from the property. It’s costly and time intensive. Typically you’ll receive a “cash for keys” offer – money to move out and leave the place in good shape.