Bankrupt Michigan Homeowner Wins Appeal to Undo Title Transfer

A Michigan resident is entitled to judgment under the US bankruptcy code to undo the preferential transfer of her foreclosed property to a county treasurer, a federal appeals court ruled.

Bay County, Mich.'s taking of title and plan to sell Carrie Reinhardt’s home violated her rights because it would have netted the municipality more than it would have received in a hypothetical bankruptcy liquidation scenario, the US Court of Appeals for the Sixth Circuit said Wednesday in an opinion overruling two lower courts.

Based on a mutually stipulated estimate that the property is worth around $75,000, the proceeds from a ...