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Filing for bankruptcy temporarily protects your assets, including your house. Surrendering the house indicates that you will no longer abide by the terms of the loan agreement, and the mortgage lender can claim its security interest in the property. Once you inform the court that you are surrendering the house, the mortgage lender must follow certain procedures to remove the bankruptcy protection from the property and start foreclosure proceedings.
If you exhaust all options to save your home from foreclosure, bankruptcy may be an option. The type of bankruptcy you choose to file will determine whether or not you can reaffirm your debt. When you have secured debt, such as a mortgage, you can either surrender, reaffirm or continue to pay on the property. Homeowners who surrender the home during bankruptcy are unable to reaffirm the debt afterwards.
Although debtors often have the option of trying to hold onto their home through a bankruptcy proceeding, sometimes this isn't logical. The home may be worth less than the outstanding mortgage, or maybe you just want to get out from beneath mortgage payments you can no longer afford. If you relinquish your home through the bankruptcy proceeding, the mortgage holder can't turn up at your door the next day and demand that you leave, but you should have a game plan for where you're going to go after you file.
When a debtor files for bankruptcy, different rules apply to a leased vehicle and a car loan. A debtor may be able to reduce the amount owed on a car loan in Chapter 13, but this does not apply to leased vehicles. In both cases, however, the debtor has the option of surrendering or keeping the vehicle.
A debtor in bankruptcy is able to take advantage of the surrender process. Surrender in bankruptcy involves assets that are used as collateral for a consumer debt. For example, real estate with an outstanding mortgage loan or an automobile with a lien due to financing are both potentially subject to the surrender process during bankruptcy proceedings.
Dealing with a mortgage that is considered "under water" is a challenging and frustrating situation. A mortgage is underwater when the market value of the property is below the amount owing on the mortgage loan. There are some viable and reasonable strategies to employ if you want to resolve the issue of a mortgage that is underwater.
Filing bankruptcy is not an easy decision to make, even more so when you do not fully understand what you are agreeing to. While an article is never a replacement for an attorney, understanding some of the terminology is useful to your discussion.
After filing for bankruptcy, you face a variety of difficult decisions about what to do with your assets, with property that you own. For example, if you own an automobile--and most people in bankruptcy do own cars--you may elect to surrender a vehicle in bankruptcy. If that is the case, if you elect to surrender your car in bankruptcy, there is a specific set of procedures that you need to follow to accomplish this objective.
The process for surrendering your house house in a bankruptcy proceeding depends upon the type of case you file. Consumers generally elect to pursue either a Chapter 7 or Chapter 13 bankruptcy. Although the process for surrendering real estate differs from each type of case, relinquishing your home is not complicated.
Having filed a Chapter 13 bankruptcy case, you need to know about all of the options that are available to you. In many cases, when a person files this type of case the presumption is that she wants to retain possession of her home. However, it is possible for you to surrender a house in Chapter 13.
