When a Chapter 7 or a Chapter 13 Bankruptcy is filed and a Sheriff’s Sale of a property is scheduled, New Jersey Law does not necessarily require that the mortgage company cancel the Sheriff’s Sale.    Instead, the Plaintiff may adjourn the sale to a later date.    The bankruptcy code does require that the Plaintiff cannot proceed with the Sheriff’s Sale of the New Jersey Property.    

This procedure was allowed in a Third Circuit Decision.   In Taylor v. Slick, 178 F.3d 698 (3rd Cir. 2000), the Court allowed that a Plaintiff could adjourn the Sheriff’s Sale while the Bankruptcy Case is pending.  

Where a lawyer represents a Debtor in Chapter 7 or Chapter 13 Bankruptcy in New Jersey, the attorney should clarify whether a HUD Letter regarding notice of the new Sale date may be sent to the Debtor while the Bankruptcy case is pending, without notice to the attorney, or whether such letter would be subject to the appropriate sanction pursuant to 11 U.S.C. §362.  

This case shows the need that anyone who is faced with a foreclosure in New Jersey and considering a Chapter 7 or Chapter 13 Bankruptcy case should consult with an attorney who is experienced in these matters.

Tags: Adjournment of Sheriff's Sales, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Foreclosure in New Jersey, Sheriff's Sale in New Jersey

This entry was posted on Tuesday, June 9th, 2009 at 5:00 am and is filed under Analysis & Comment. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.