When it comes to the needed protection, postpetition purchasers of a debtor’s real property have faced a lot of uncertainties that most likely have turned to a troublesome experience for many. This is exacerbated when the statutory automatic stay prohibited the transfer of a debtor’s property after the commencement of a case. Automatic stay, in theory, prevents all postpetition transfer that is made without permission of a court responsible for bankruptcy, thus allowing them also to hold those violators in contempt.
So in order to understand what is Postpetition Transfer, one must also realize the complexities of the concept stipulated under the bankruptcy law.
The Postpetition Transfer
There are a lot of instances cited under the bankruptcy law that aim to protect the creditors and debtors’ rights against all sorts of violations that may render more trouble and suffering to either of the mentioned entities. In accordance to these included sections under the law, courts are able to come up to a verdict that would be in favor to the rightful person under a certain circumstance. In Postpetiion Transfer, for example, its value relies on the fact that appropriate measures will be used for the settlements of cases as well as other transactions.
It was crafted to help in reducing the risk with debtors from the strike down of the court once further information pertaining to the concerned case becomes available. When it comes to Postpetition Transfer, it does not merely arrive at rightful decisions after proceedings but it also minimizes the aggravating situations for the debtor.
Important Aspects of the Law
Under postpetition transfer, a debtor is only allowed to transfer a property after a case has commenced. In cases where unauthorized postpetition transfer is conducted, meaning those that are transacted before the proceedings have started, will not be honored by the bankruptcy law and the court. This will not discharge a debtor from his or her debts as the court only honors verdicts after gaining advice from a qualified personnel of the law.
Another entity benefited by this is the purchaser. Since there are cases where creditors often proceed with involuntary foreclosure sales including tax sales of the debtor’s real property and then create an “innocent” party in luring them to purchasing the property, the law also stipulates their protection. Innocent party in this case refers to those who have no knowledge of the pending bankruptcy case of a real property. This will be considered as void and in violation of the automatic stay.
Due to the undeniable fact that debtors could be a little way out of hand when crisis arise, it is always important to lay out the assurance for company owners and companies as well as innocent purchasers when it comes to protecting their assets. This is where knowing and learning more about what is Postpetition Transfer is highlighted.