Connecticut House Bill HB05508

Connecticut 2015 Regular Session

• Introduced: 1/16/15
• Refer: 1/16/15

Caption

An Act Concerning A Foreclosure Committee's Ability To Recoup Expenses And Fees When A Real Estate Owner Files For Bankruptcy.

Impact

The implications of HB 5508 are significant for both foreclosure processes and the rights of real estate owners in bankruptcy situations. By allowing foreclosure committees to recover their costs, the bill seeks to create a more equitable system where those tasked with managing foreclosure sales are compensated for their work. This move could ultimately affect the willingness of committees to engage in the foreclosure process, as the assurance of compensation may attract more professional engagements, thereby potentially expediting property sales during foreclosures.

Summary

House Bill 5508 aims to amend chapter 846 of the general statutes to enhance the financial protections of court-appointed foreclosure committees. By enabling these committees to recoup expenses and legal fees incurred during the process of foreclosing on properties, this bill addresses scenarios where a real estate owner files for bankruptcy protection. The intent of the legislation is to ensure that foreclosure committees are not left bearing the costs associated with their statutory responsibilities, particularly when faced with owners seeking to discharge all debts as part of bankruptcy proceedings.

Contention

While the bill could alleviate some financial burdens on foreclosure committees, it may also raise concerns among consumer advocacy groups. Critics may argue that allowing committees to recoup expenses and legal fees could create a disincentive for property owners to seek bankruptcy protection, particularly if they face exorbitant costs related to foreclosure. Additional contention could arise regarding the balance between protecting the interests of foreclosure committees and ensuring that property owners are not unfairly penalized during financial hardships.