Whoever I found this from, they put in the "natural person" and "unencumbered" parts for exactly this reason I suspect. Bidders cannot even have any debt. Zero whatsoever. I'm guessing the one year waiting period is also for creditors to discover and nullify any potential conflicting use of cash they might want to attach? I remembered it as they wanted to zero out as much as possible all leverage from the price discovery.

Like I said, I found the entire idea of a competitive market in price discovery to establish tax basis fascinating, not the specific implementation details.