Will bankruptcy wipe out money owed on a mortgage for a property that has been foreclosed on and auctioned?
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Will bankruptcy wipe out money owed on a mortgage for a property that has been foreclosed on and auctioned?
Asked on May 7, 2012 under Bankruptcy Law, California
Answers:
Janet Martin / Janet Martin Attorney at Law
Answered 11 years ago | Contributor
If after auction, there is a balance, called a deficiency, in most cases, in California, current law is that such deficiency is not enforceable as a personal debt. You do not need to file bk. If you are in the rare situation where a deficiency is enforceable, yes it will be discharged as an unsecured debt, assuming you qualify to file bk. You can not make more than a certain amount of income to qualify for a Chapter 7 liquidation.
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