QUESTION
Why do I need to file a deed in lieu if my bankruptcy was discharged?
Asked on Mar 09th, 2012 on Bankruptcy - Mississippi
More details to this question:
Why after filing bankruptcy and being discharged from a home loan do I need to file a deed in lieu? If I'm discharged from the loan and don't have interest in the home, like I don't live there, haven't for two years, then why am I responsible for the property? Shouldn't that all be taken care of when being discharged of the loan?
10 ANSWERS
Daniel James Wilson
Who is trying to get you to a deed in lieu?
Answered on Jun 19th, 2013 at 12:39 AM
Chapter 7 Bankruptcy Attorney serving Milwaukee, WI
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Law Offices of Deborah A. Stencel
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No. The bankruptcy did not take care of the whole matter. When you purchased the property, it was deeded to you. This means you hold the title (I.e, own the property). At the same time you took out a loan on the property and signed a note and mortgage. This means you owe money to the lender and the lender kept a security interest in the property. All the bankruptcy did was relieve you of your personal liability on the loan. The deed is still in your name. The lender needs a a deed signed over by you or to foreclose in order to have the property transferred out of your name.
Answered on Mar 15th, 2012 at 7:26 PM
Bankruptcy Attorney serving Hampton, VA
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Haven Law Group, P.C.
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You do not have to. It makes it a little easier for the mortgage company than an actual foreclosure.
Answered on Mar 12th, 2012 at 4:36 PM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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A discharge of your liability on the home mortgage loan neither affects your home ownership interest nor does it affect the lien on the home. Your discharge just means you don't owe the debt on the home. Until the mortgagee forecloses on the home you have all the responsibilities and privileges of home ownership except the payment on the mortgage. No it was not taken care of.
Answered on Mar 12th, 2012 at 3:48 PM
Commercial Bankruptcy Attorney serving Davie, FL
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Law Office of Jeffrey Solomon
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This is a common question. Listing the property and the creditor in the bankruptcy eliminates the debt. But you still own the property unless the trustee sold it until the property is foreclosed. You are still responsible for post bankruptcy association fees. You could be responsible if someone had an accident on the property. There could be issues with code enforcement.
Answered on Mar 12th, 2012 at 3:23 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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You no longer have personal liability on your home loan due to the bankruptcy discharge. You still own the home until the lender forecloses. Perhaps the lender will accept a deed in lieu of foreclosure. Until thd property is no longer titled in your name you are responsible for its maintenance. Notify the lender to pay the insurance and taxes.
Answered on Mar 12th, 2012 at 3:04 PM
Domestic Relations Attorney serving Huntsville, AL
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Ferguson & Ferguson
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Filing a deed in lieu of foreclosure could save your credit report from having a foreclosure also being placed on it.
Answered on Mar 12th, 2012 at 2:47 PM
You can still be a holdover tenant- many folks who file Chapter 7 and reject their mortgage debt continue to live in the home until evicted in District Court. The foreclosure redemption period/other foreclosure rights are not Stayed or waived by the filing of a Chapter 7. The foreclosure process protects the mortgage company from illegally taking possession of a home when the Debtor(s) may still live there. They have no choice but to foreclose to obtain legal title back to the property unless they receive a Deed back first.
Answered on Mar 12th, 2012 at 2:21 PM
Criminal Law Attorney serving Ellicott City, MD
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Law Office of William C. Wood, LLC
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If you are still the owner of record, you may be liable for taxes, homeowner association dues, etc.
Answered on Mar 12th, 2012 at 2:20 PM
Chapter 7 Bankruptcy Attorney serving Clinton, MS
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Timothy Kevin Byrne Attorney at Law
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You are correct that when you abandoned your property in the bankruptcy and the debt was discharged you are no longer responsible to that creditor. It sounds like they never lifted the stay and foreclosed during the bankruptcy. You do not need to sign a feed in lieu.
Answered on Mar 12th, 2012 at 2:10 PM