conflict of interest that the law was designed to prevent.
If you are going through a bankruptcy as well as a foreclosure, you should be aware that these are two separate processes. You may be interacting with both a bankruptcy trustee and a foreclosure trustee, but these are different parties with different roles that should not be confused. In “mortgage states,” the lender must follow a judicial process by successfully suing you before foreclosing. This provides you the opportunity to be heard in court and possibly postpone the foreclosure a while. If the court decides in the lender’s favor, the lender can then auction your home.
DEFICIENCY JUDGMENTS
Whether or not you live in a deed of trust state, the option of pursuing a judicial foreclosure is available to your lender. Following the foreclosure sale, whether the property is sold as an REO or to a new individual owner, the courts may grant a deficiency order against you if the sale price fails to cover your mortgage balance. For example, if your mortgage balance was $370,000 and the house sold for only $350,0000, the lender could ask the court’s authorization to collect the $20,000 difference from you. That could include garnishment of your wages until your debt is paid off. But North Carolina has several anti-deficiency laws. These laws limit the circumstances under which the bank can get a deficiency judgment and limit the amount of a deficiency judgment in some situations. WHEN NORTH CAROLINA LAW LIMITS THE DEFICIENCY AMOUNT
If the foreclosing bank buys the property at the foreclosure sale,
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