I have completed chapter 13, its been 3 months. There was no claim from any creditors. The objective was to give back a property to the bank. I have since received - tax delinquency document for the property; which indicate the property has yet to be transfer to the bank (WF).
Although your plan probably stated that the property was going to be surrendered, that does not accomplish the act of transferring it. The bank has to either foreclose or accept a deed back from you. Unfortunately, the banks frequently don't act to take possession of property quickly, or even slowly for that matter. The bankruptcy discharge only relieves your liability for the note. The post-petition property taxes are being billed to you because the property is still in your name. If you are living in the property, enjoy the free living. If not, you could have been renting it out all this time. Once the bank takes back the property, the taxes will become their liability.
If you were represented by an attorney during your case then you should speak to them. If you weren't represented, then you need to make sure you handled your chapter 13 properly (noticing creditors, plan requirements etc). Finally, keep in mind that a bankruptcy only relieves your liability to the creditor for the loan, it does not transfer ownership. Your creditor still has to foreclose on the property or you can attempt a deed in lieu or short sale. i have also changed the practice area of this post to bankruptcy.
First, you , unfortunately, don't understand how it works so I take it you did not have an attorney.
Second, the property is FOREVER yours until the property is transferred by agreement or foreclosure. You should have been renting it out all these years or living in it for free. Irrespective, here are your options assuming the property is vacant:
First, you cannot transfer any interest in your home until the bankruptcy case is CLOSED or an Order of Abandonment entered on the home by you (not Discharged but CLOSED) so call and verify that even though your case is 2 years old. If closed, then it is now your property if you wish to dispose of it. That then leads to your options:
Option #1: Move back in and live there free as long as you can until you have to vacate. Even after a sale the question is how long are you able to remain there before having to leave. Each state has its own foreclosure laws so you would have to check with a bankruptcy attorney or real estate attorney in your state on that issue of how long can you stay there. Save your money and use to move into your next place.
Option #2 See if the creditor will accept a Deed in Lieu of Foreclosure by Paying YOU money ($3000? Ask them ) in return for that Deed. Why would they? Because they would want the property in their name now so they can resell it quicker. Why would they not? Because there might be judgment liens or 2nd mortgages or warrants or other encumbrances on the property that a foreclosure will insure clean title in the creditor and not subject to any other liens.
Option #3: you could try and see if the Creditor/Mortgage holder agrees to a short sale. Why not? There may be encumbrances like in #2 above. Why so? So they can receive the same money they would receive but faster than if they foreclose and sell it for the same price. What do you get? Nothing. Zilch! So why not live there for free or rent it out is my comment in such a case.
Option #4: Just stay moved out and let it sit until foreclosed. Someone might break in, etc..and yet your personal liability is still discharged.
Option #5 Rent it out. Why not? What if they take 2 more years to foreclose? Collect first and last and that way you have some monies no matter what. Rent on a month to month as you don't know when foreclosure will occur until later.
You might want to keep some type of insurance on the property in case someone gets hurt and or your personal belongings if worth the insurance on them.
If you have any Homeowner Association Dues (HOA) then any due AFTER (not before the petition date but AFTER) until the property is not in your name you are liable for! If ever there was any discussion of a special assessment also post petition you would then want to NOT have title in your name when such assessments are passed by the HOA!
Eventually they will foreclose but until then it is your property.
After your case is over 45 days past discharge make sure you order your 3 credit reports and make sure all discharged type debts state “zero owed, discharged in bankruptcy”. Not written off debt, etc..but zero owed and object to anything else that is untrue. Those reports should simply state facts. On your mortgage no payments were due after you filed so make sure it shows no late payments post petition either.
When the foreclosure occurs, it will show on your credit report then!
I hope my answer and the other answers by other attorneys assist you. Good luck with your fresh start. Sincerely, Richard D. Granvold, Attorney at Law.
You are not alone. This is one of the most difficult challenges facing my Bankruptcy clients who have surrendered their home. These Zombie foreclosures are abandoned homes that have fallen through the cracks. There are 16,000 homes like this is Southwest florida. The three top mortgage lenders responsible for processing these defaults are Bank of America, Wells Fargo and Chase. Options are as others have said, attempt a Deed in Lieu or short sale but I am of the opinion some legislation is necessary to enforce the follow through on these Zombie foreclosures. Your other options are too rent the property out or do a quit claim deed to a low bidder. It is unfortunate when a debtor files Bankruptcy only to find out 10 years later they are still on the Title to properties they surrendered and now they are struggling to acquire financing for a new home.
