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Sheriff Sales FAQ

There is a Sheriff Sale Scheduled for My Home - what should I do?

In New Jersey, a home owner can ask the sheriff for two adjournments of the sheriff sale. For a fee of $28, you can go to the sherifff's office in person and ask for a delay of the sale date by 30 days and you can do this two times. That means you can get 60 days of delay which may be enough time to figure something out. Now that you had the sheriff sale delayed, or if you already used your delays, With all of this delay, you have to decide whether or not you can save the home or just get ready to move. We can help you decide so please call to discuss your options.

Can I delay the sheriff sale even further after I used up my two adjournments?

After you used the adjournments I told you about above, you can get further delay with a bankruptcy. Yes, the sheriff may have told you that maybe you could get more delay by talking to the judge but good luck - this is almost impossible.

Can I still save my home even though there is a sheriff sale scheduled?

Maybe. All of the available options are still available including loan modification or bankruptcy. It's best if you contact me to discuss you situation specifically. I can help you undersatnd all of your options and make a wise choice.

How does bankrptcy help stop a sheriff sale?

Bankruptcy includes what is known as an "automatic stay" which is a fancy way of saying any and all collection activity by all of your creditos is "stayed" or "stopped" immediately upon your filing for bankruptcy. This includes sheriff sale. Of course there are exception to this but ypically, bankruptcy will stop the sheriff sale.

How does bankruptcy save my home from foreclosure?

Once the automatic stay goes into effect, bankruptcy also gives you options to save your home. You can apply for a loan modification through the court's loss mitigation program or you can make payments through the bankrutcy trustee to catch up on the missed payments and at the same time start making regular monthly mortgage payments. If necessary, bankruptcy will also provide you with the opportunity to sell your house and save any equity you may have in it.

If I can't save my home, can I at least get more time in my home before I have to move out?

Sometimes this is the best you can do. Using the adjournments before the sheriff sale gets you 60 days. Filing for a chapter 7 bankruptcy before the sheriff sale can get you another 90 days and then once the sheriff sale takes place you will most likely be able to stretch out a move date another 90 days. Add those all up and you have another 240 days of extra time in the home.

Once a sheriff sale takes place, how long do I have in the house before I have to move?

Once the sheriff sale takes place, the sheriff waits 10 days before the deed transfers to the new owner. Although the sheriff will tell you to move out right away, if you don't the new owner will have to evict you and that takes 90 days.

After the sheriff sale, what is the 10-day right of redempton?

In the 10 days following the sheriff sale, the homeowner has the right to payoff the amount owed and stop the deed from transferring to the new owner. This doesn't happen often but you do have the right.

If the sheriff sale already took place, can I still file bankruptcy?

Yes, you can but its benefits are limited. If you file within the 10 days following the sale, you can delay the transfer of the deed for 60 days. Filing for bankruptcy after the sheriff sale will also enable you to discharge any amount that is owed on the mortgage loan over and above the amount the lender received throught the sheriff sale. Of course, filing bankrupty will discharge all of your other debts too. But, filing bankrutcy before the sheriff sale has the added benefit of delaying the sale AND preventing any tax liability from forgiven debt.

What are the income tax issues I should be aware of?

When a house is sold at a sheriff sale and the lender decides not to pursue any amount owed over and above what it received at the sheriff sale, that amount is foregiven by the lender and the IRS requires to the lender to report the amount forgiven as taxable income for that tax year. Also, if you sell your house through a short sale for less then what is owed, the difference is also forgiven and the lender is requred to report that forgiven amount to the IRS as taxable income. This could result in be a major tax liability. The reporting is done through a 1099 form. Speak to your accountant when filing your taxes to determine whether or not you would be requried to pay taxes on this amount. 

Bankruptcy however can prevent this. If the debt is discharged before the sheriff sale, it cannot be forgiven and therefore is not reported as taxable income.

My Realtor wants me to do a short sale - how can that help me?

Short sales benefit realtors and not homeowners. The realtor is paid a nice commission on the sale. You will get no benefit whatsoever.

Can I get money from the bank after the sheriff sale to help me move (cash for keys)?

Depending on who purchases the property at the sheriff sale, and often it is your mortgage lender, someone will no doubt visit the property following the sheriff sale to determine the condition of the property, whether or not anyone is living there, and if the property needs to be secured. This person will also be charged with preparing the property for sale and perhaps may also be the realtor who lists the house for sale. Often, knowing the amout of time and hassle it might be to evict you from the property if you don't leave right away, a smart purchaser will offer you money to move. For example: $5000 if you move in 30 days or $3000 if you move in 60 days. These numbers are common.

How do I get started?

As you can see there is a lot to understand. That's where we come in. Call or schedule a phone appointment with me right away to discuss you situation. We are here to help.

Do I have to miss work to meet with you to discuss my case?

We understand most people can't meet without missing work. No problem. We do not require an office visit.

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