Bankruptcy Trumps Condemnation

If you are a land owner whose property is being condemned AND you have declared bankruptcy, the NC Department of Transportation cannot go through their normal steps of condemnation. The bankruptcy court must get involved, as the DOT recently learned the hard way.

According to an article in the News & Observer, a federal bankruptcy judge in Raleigh fined DOT for illegally condemning a half-acre of land in 2012 and demolishing a vacant building. To make matters worse, the DOT’s lawyers made “untrue” statements a year later in order to win the condemnation.

But bankruptcy filings are supposed to protect landowners from actions by their creditors… including condemnation proceedings. In this case, where the DOT took the land and demolished a building, the government will need to pay lawyer’s fees and punitive damages to the land owner. Plus, because the land was taken illegally, the DOT will have to answer an inverse condemnation lawsuit.

The moral of the story:  If you have filed for bankruptcy, there is an automatic stay on condemnation of your land. If you find yourself in a position of having to defend your property, contact an experienced land condemnation attorney, such as HensonFuerst Attorneys, to help protect your rights. Call us at 1-800-452-9633, or visit our website at

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Raleigh, NC 27612
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