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Rescheduled Foreclosure Sales: Enough Is Enough!!

By L. Jed Berliner, Massachusetts Bankruptcy Attorney on Apr 13, 2008 in Bankruptcy Cases & Legislation, Bankruptcy Protection & Automatic Stay, Massachusetts

How many times may a foreclosing mortgagee reschedule the sale after a bankruptcy is filed? In Massachusetts, maybe once is enough.

It has been the accepted custom to allow one rescheduled sale, to preserve the status quo in case a bankruptcy filing is quickly dismissed. But Judge Joel B. Rosenthal’s eyebrows were raised at allegations of numerous reschedulings, so he issued a district-wide order to show cause why the reschedulings were not violations of the automatic stay. He then refused to suspend execution of his order despite a pending appeal. In re Soderman, 2008 Bankr. LEXIS 384 (Bankr. D. Mass., 2008).

The Soderman test for a stay violation is whether the sale was postponed to harass the debtor, gain an advantage for the creditor, or revive the financial pressures which drove the debtor into bankruptcy in the first place.

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