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Intersection of Bankruptcy and State Foreclosure Laws

Protecting Foreclosure Remedies and Overcoming Bankruptcy Pitfalls When Dealing With Distressed Borrowers

Recording of a 90-minute CLE webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, February 19, 2020

Recorded event now available

or call 1-800-926-7926

This CLE course will provide counsel to lenders and creditors with a review of the intersection between bankruptcy and state foreclosure laws with respect to secured interests in personal property and commercial real estate. The panel will outline strategies to minimize risks in exercising foreclosure remedies and navigating bankruptcy.


Secured lenders are increasingly resorting to enforcing foreclosure remedies under UCC Article 9 and state real property foreclosure laws. However, when the borrower files for bankruptcy, state foreclosure laws often collide with bankruptcy laws.

As lenders exercise foreclosure remedies before bankruptcy, they must understand the potential pitfalls that they will face if the borrower files for bankruptcy. There are steps lenders can take to minimize the impact that bankruptcy will have on their secured interest.

Once a lender is in a bankruptcy proceeding, the lender's abilities to avail itself of state law foreclosure remedies are altered. The lender then must navigate the bankruptcy rules to preserve its foreclosure remedies.

Listen as our authoritative panel of bankruptcy attorneys discusses the tension between bankruptcy and state foreclosure laws and provides strategies to minimize bankruptcy risks in exercising foreclosure remedies.



  1. Strategies for navigating bankruptcy of distressed borrowers
    1. Relief from the automatic stay
    2. Cash collateral
    3. Post-relief from stay
    4. Asset sales and credit bidding
  2. Impact of bankruptcy on UCC rights and collateral
    1. Fraudulent transfer
    2. Preference actions
    3. Lender liability
  3. Impact of bankruptcy on distressed real estate
    1. Asset sales
    2. Dirt for debt
    3. Deeds-in-lieu of foreclosure
    4. Single-asset real estate
    5. Bad boy guarantees


The panel will review these and other vital questions:

  • What must the lender consider in conducting a UCC foreclosure sale to minimize a subsequent challenge in the debtor's bankruptcy?
  • What factors must a lender show to obtain relief from the bankruptcy automatic stay?
  • What is the effect of a foreclosure sale or deed in lieu transaction in a subsequent bankruptcy proceeding?
  • What bankruptcy rules apply to single-asset real estate?


Cohen, Theodore
Theodore A. Cohen

Special Counsel
Sheppard Mullin

Mr. Cohen specializes in creditors' rights and focuses on lender, indenture trustee, and lessor representation...  |  Read More

Mercado, M. Reed
M. Reed Mercado

Senior Counsel

Mr. Mercado is a member of the firm’s Commercial Finance Practice Group. He represents a wide range of...  |  Read More

Schlichting, Nancy
Nancy R. Schlichting

Flora Pettit

Most recently, Ms. Schlichting’s practice has been focused on corporate disputes including shareholder disputes,...  |  Read More

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