Hijacking a Bankruptcy

Bankruptcy hijacking is becoming a problem in the Pacific Northwest.  It started in southern California, but it has now made its way up here.

Bankruptcy hijacking is where a person in foreclosure illegally and unethically stops the foreclosure by deeding their property to a stranger who is in bankruptcy.  A copy of the bogus deed is sent to the foreclosing party who initially does not realize the deed is bogus.  Fearing they might violate the automatic stay they stop the foreclosure and then typically file either relief of stay motions or object to a Chapter 13 Plan on the basis that the bankruptcy fails to take into account the property and debt subject to the foreclosure.  These motions and objections come as a complete surprise to the debtor, to say the least.

The debtor now has to respond to the lender’s motions and objections, incurring time and expense.  The debtor also must convince the court that the debtor has not committed bankruptcy fraud by failing to list the property and debt on the schedules and/or Chapter 13 Plan.

Unfortunately if you are a debtor in bankruptcy, there is no way to avoid this hassle.  It’s something to which you must reacted, which is totally unfair.