Family Locked out of Home After Squatters file for Bankruptcy
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Family Locked out of Home After Squatters File for Bankruptcy

August 13, 2012

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A Colorado family has been unable to enter its home after two strangers who squatted in their house for nearly a year filed for bankruptcy, which prevented the sheriff from evicting them, according to a report from ABC News.

The remarkable story reveals the power of bankruptcy, particularly when it comes to halting eviction or home foreclosure, as the Donovan family is learning in the strangest of circumstances.

Sources say that Troy and Dayna Donovan left their home in Littleton, Colorado, when Troy found a temporary job in Indiana. Both were unemployed and desperate to find a job to support their two children.

The Donovans had also fallen more than $20,000 behind on their mortgage payments, as their last payment was made in the summer of 2011, so they hoped that the temporary move to Indiana would provide enough income to pay the Colorado mortgage debt.

What the Donovans didn’t know, however, was that shortly after they left their home, two people, Veronica Fernandez-Beleta and Jose Rafael Leyva-Caraveo, moved into the house.

And under the obscure legal doctrine known as "adverse possession," these squatters could establish legal ownership of the property if the original owners didn’t challenge them for several years.

Troy Donovan, however, learned after several months in Indiana that people were living in his house, so he filed for a forced eviction with the Arapahoe County Sheriff on July 16.

In a savvy legal response, sources say that Fernandez-Beleta filed for bankruptcy a few days later, right before the forced eviction was scheduled to take place. As a result, the sheriff’s office had to stop all eviction proceedings.

According to David Walcher, an official with the local sheriff’s office, Colorado police "will not proceed with an eviction if there is a bankruptcy in question."

And the legal wrangling could become more complicated because the current occupants of the home have paperwork showing they legally purchased the house from a real estate agent for $5,000, which suggests that the Donovans had completely abandoned the home.

In the wake of a foreclosure, such disputes have become commonplace. And it could take several months for the Donovans to sort out their legal mess, depending on the length of Fernandez-Beleta's bankruptcy case.


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