Court Decisions

In the case of TD Bank v. LaPointe, the Bankruptcy Appellate Panel for the First Circuit ruled on February 24, 2014 that a debtor’s interest in mortgaged real estate terminates when the gavel falls at a foreclosure auction, even if the debtor files Chapter 13 bankruptcy the following day.  The bank, therefore, was entitled to relief from the automatic stay to record the foreclosure deed because the real estate was not property of the debtor’s estate.  The case leaves open some interesting questions, such as what rights the debtor has should the foreclosure deed not be recorded, or what rights intervening lien creditors may have should the foreclosure deed be recorded after sixty (60) days.  Click the following link to view a copy of the full decision.           TD v. LaPointe