QUESTION
Is there a way to legally unload a property after bankruptcy?
Asked on Jun 04th, 2011 on Bankruptcy - California
More details to this question:
I filed Chapter 7, but still own a rental property. The bankruptcy case was discharged already, but hasn't been closed, and we have no way to find out when this will happen. The property has been boarded up, but is continuing to incur taxes and other penalty fees on the house. We have been told that those fees can easily be transferred from the property and turned into a judgement against us (in which case we would be liable to pay them, regardless of the bankruptcy). We have also been told that we can not sell the property without the approval of the entities that hold those debts on the property, and would not likely be able to sell the house due to the condition and neighborhood. We have also been told that these entities do not have to foreclose - they can continue to hold the debts in hopes that the owners will get another job, allowing them to garnish wages indefinitely to collect those debts and any new debts that are incurred. It's unethical, but we can't find any course of action that will result in the close of the bankruptcy case or result in a foreclosure of the property or some other removal of the property from our name.
4 ANSWERS
Glen Edward Ashman
Your question makes it sound like you did not have a lawyer (BAD mistake) as a lawyer would have gone over pros, cons and options and still can assist you.
Answered on Jul 12th, 2013 at 12:59 AM
Litigation Attorney serving Portland, OR
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Daniel G. Hoarfrost
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If your bankruptcy case is still open, the question is whether the trustee wants to assert an interest in the property. If not, you should ask him to "abandon" the property. That will clear your title and you can sell the property or quit-claim it back to the lender.
Answered on Jun 08th, 2011 at 3:24 PM
Bankruptcy Attorney serving Herndon, VA
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Maureen O'Malley
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First, the lender cannot collect any money from you on the property since you filed bankruptcy. Lenders have been increasingly unwilling to foreclose because they also can't sell. It's possible that the taxing authorities in your jurisdiction, or the HOA, might be willing to foreclose. I don't know why you can't sell without permission of those entities, unless they have a lien, and the liens would be paid from the proceeds of the house. This is a giant problem in bankruptcy law and I'm sorry you're having to go through it.
Answered on Jun 08th, 2011 at 12:28 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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Once you have received your discharge your personal liability on the loans is no long owed. Tell the lender you want to give them the deed in lieu of foreclosure or instruct them to foreclose. Drop the insurance, don't pay the taxes and don't mow the lawn. Give the lender the keys. Notify the police that the property has been abandoned and the lender has the keys. If all else fails sue for the maximum in small claims court (you won't get much of a result there but you would get the lender's attention.)
Answered on Jun 07th, 2011 at 1:17 PM