When you go through a Chapter 13 bankruptcy, you can continue to make your mortgage payments and keep your home. If you have decided that you do not want the home, you have a few options for dealing with the property and the debt that comes along with it. The option you can use depends largely on whether or not your lender is working with you.
What Happens When You Move Out?
If you have not taken legal steps to get rid of the home and just moved out, you could still be on the hook for your mortgage. There is also the responsibility of homeowners’ association fees, fines from the city for failing to maintain the property, and any damage that occurs.
You have to notify the lender before moving out of the property. If not, the lender could take months or even years before foreclosing on the property. In this instance, you would still be responsible for the property and the previously mentioned fees. You could easily end up in debt all over again.
Can the Trustee Help Get Rid of the Debt?
When you file for a Chapter 13 bankruptcy, you have to complete a Statement of Intention form. On the document, you can detail what you intend to do with the home. If the home is worth more than the lien or the mortgage, the trustee can take the home, sell it, and apply the money raised towards your debts.
If the home is worth less than the mortgage and liens though, the trustee could decide it is not worth the effort to take the home and abandon it. If this happens in your case, you will still be responsible for the home and all the responsibilities that comes from owning it.
Can the Bankruptcy Court Help?
There is a chance you could surrender the home through your Chapter 13 filing with the bankruptcy court. In this instance, your attorney could include language in your filing that would not only allow you to surrender the home but also transfer it to the lender. After that, you would need to take a copy of the court order to your local property records office and have it filed along with the home’s records.
Whether or not this is an option for you depends on the court and state in which you live. Some states do not allow this. In those instances, it is important to have an attorney on your side who understands the ins and outs of bankruptcy law in your state.
Whether you choose to keep or get rid of your home, it is important that you take action. Always rely on an attorney to give you sound advice that is specific to your case. Visit http://wfactorlaw.com for more information.