April 2009
Charles A. Lovell, Esq.

Judge Votolato's April 1, 2009 decision in In re Medaglia represents a major change to the effect of a bankruptcy filing on a foreclosure in Rhode Island where the foreclosure deed has not yet been recorded. Under In re Glenwood, his 1991 decision, a bankruptcy filing before deed recording would void the foreclosure. Because of a change in the Bankruptcy Code, 11 U.S.C. § 1322 (c)(1), he has now found that the foreclosure sale is complete "when the gavel goes down" at the foreclosure sale.

Assuming that the foreclosure was conducted in accordance with Rhode Island state law, it will no longer be necessary to obtain relief from the stay or wait until the bankruptcy is closed and then re-do the foreclosure. So long as the bankruptcy is filed after the foreclosure sale is conducted, the foreclosure will survive the bankruptcy filing.

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