QUESTION
What will happen when we move out of our house on mortgage after bankruptcy?
Asked on Mar 05th, 2014 on Bankruptcy - California
More details to this question:
We filed bankruptcy and the house was included. We have been living in the house and making payments. Now I want to know what will happen when we move out. Am I responsible for taxes and insurance at that time? Also can it hurt my credit score more than it already has?
10 ANSWERS
You have no responsibility or liability. Take care of the property and do not needlessly damage the house. You will be fine.
Answered on Mar 06th, 2014 at 5:34 PM
Debt Relief Attorney serving Anaheim, CA
Partner at
Marlin Branstetter Attorney at Law
If you move out you will be responsible for taxes and insurance on the house until you are no longer on title. Also it is your responsibility to maintain the property during that time. If you don't you could be liable for any fines the city may impose if the proper falls into disrepair. You should contact the bank and see if they will take a deed in lieu of foreclosure. You don't state how long it has been since you filed BK but a foreclosure could damage your credit score if the bankruptcy was some time ago and you have started to rebuild your credit. If the BK is recent it will probably not harm your score. Also the deed in lieu of foreclosure would prevent a foreclosure from appearing on your credit report.
Answered on Mar 06th, 2014 at 5:34 PM
Deborah F. Bowinski
Assuming that you did NOT reaffirm your mortgage loan, you can walk away from the property without any further obligation on your mortgage. HOWEVER, until the property is either sold or foreclosed upon you remain the owner with all that goes along with it. As the owner you will remain responsible for utilities that are used/billed for the property, for the maintenance and upkeep of the home to comply with local code requirements, for any negligence claims if someone is injured on the property because the sidewalk was not cleared of snow or ice, etc. Also, if you have a homeowners' association you remain responsible for all of their fees up until the time that title to the property is transferred out of your name. You are free to try to sell the home if you think you can or, to try to negotiate with your lender to accept the deed back from you in lieu of going through a foreclosure.
Answered on Mar 06th, 2014 at 5:30 PM
As long as you are a homeowner, you are responsible for the expenses relating to the house. The bankruptcy only discharged your mortgage debt, not your taxes & other liability as a homeowner.
Answered on Mar 06th, 2014 at 5:19 PM
Probate Attorney serving St. Louis, MO
at
Edward L. Armstrong, P.C.
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If you are still living in your house after a bankruptcy (Chapter 7??) you must have reaffirmed the debt to the bank. If you did not reaffirm you may still have some problems and I would consult your bankruptcy attorney.
Answered on Mar 06th, 2014 at 5:19 PM
The bankruptcy has no effect on the mortgage except in the unlikely event you might have personal liability on that debt, which won't be the case now unless you re-affirmed the mortgage in the BK. If you are moving out, the taxes will be secured by the property. You may wish to at least continue liability coverage on the property until the foreclosure occurs. Yes, your credit can and will be hurt more by a foreclosure. In the lending and credit world it is far worse.
Answered on Mar 06th, 2014 at 2:10 PM
2 Awards
You are not responsible for the taxes and insurance. That will be paid upon sale of the property. This information is only intended to give general information in response to an inquiry. It does not establish an attorney client relationship. This response is only based upon the limited facts presented and is merely intended to assist you in determining if you should contact an attorney to provide you with legal advice.
Answered on Mar 06th, 2014 at 2:09 PM
Debt Collection Attorney serving Chicago, IL
Partner at
Edelman, Combs, Latturner & Goodwin, LLC
2 Awards
As long as the property is in your name, you are legally liable for taxes. You are also legally liable if anyone is injured as a result of the condition of the property, so in that sense you are "responsible" for insurance.
Answered on Mar 06th, 2014 at 1:52 PM
Bankruptcy Attorney serving Walnut Creek, CA
at
Alan E. Ramos Law Offices
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When you received your discharge, your liability for the loan was cancelled. However, the lender still has a lien on the property and can (and will most likely) foreclose. Until the property is no longer titled in your name (until the foreclosure process has been completed), you are liable for anything that happens on the property. I always advise my clients to continue to maintain liability insurance on the property and, if there is a homeowner's association, to continue to pay the HOA assessments. If you are in California, you have no personal liability for property taxes. This answer was provided as a public service to a question posed on the Law Q & A website. The answer is based on the information provided and is limited to those facts. Furthermore, the answer is based on California law and their application to bankruptcy law in California. Additional information could change the context of the question and materially change the answer.
Answered on Mar 06th, 2014 at 1:51 PM