Several times a week I get phone calls that go a lot like this:

Caller: I need to file for Bankruptcy.
Me: Why?
Caller: My house is in foreclosure, and I can’t afford to keep it.
Me: Ok. So, why do you need to file for Bankruptcy?

I’ll cut to the punch. Most foreclosures in Oklahoma end when the Sheriff’s Sale is confirmed. The lender takes either the property or the sales proceeds in full satisfaction of the debt. To go after the former homeowner for any more money would require that the lender take what is called a deficiency judgment. They have to file a request for that with the Court, and it must be filed within 90 days of the Sheriff’s Sale. (12 O.S. Section 686 if anyone is checking)

If the lender doesn’t do that, they cannot come after the homeowner for any additional payment on the note and mortgage. There is an exception to that if the mortgage lender has other claims (like for mortgage fraud) against the home owner.

So, if you have been sued in foreclosure AND you want to keep the house. Call a bankruptcy attorney ASAP. If you have been sued in foreclosure AND you don’t want to keep the house, only call an attorney if you have reason to defend the foreclosure.

If you are sued in foreclosure, you don’t want to keep the house and you don’t have significant defenses or counterclaims to the foreclosure; then, just keep an eye on your mailbox. If you receive a motion seeking a deficiency judgment, then call a bankruptcy attorney. Of course, if you need to file for other reasons, you might want to go ahead and get it done.

Elaine