When surrendering your home in bankruptcy, how you handle the property and all the expenses associated with the property is important. Let’s take a look at debtor responsibilities when surrendering a home in bankruptcy:
Paying the utilities is your responsibility until you hand over the keys to the bank. Keeping the utilities on is important because failure to do so can sometimes result in property damage. For example, failure to keep your home heated during the winter could result in frozen or burst pipes if temperatures drop. Many cities offer utility assistance programs to low-income families, so keeping your home heated shouldn’t be impossible even if you’re struggling financially.
Just like your utilities, you’re responsible for property taxes until you surrender the property to the mortgage lender. If you’re property taxes are bundled as part of your mortgage, then any mortgage delinquency will equal a delinquency on your property taxes. Fortunately, once you file bankruptcy, all property taxes accrued before your filing date will become part of the bankruptcy case. Unfortunately, it’s possible that you could continue to accrue tax liabilities even after your bankruptcy filing if you haven’t handed over the keys to your lender and/or you didn’t get the timing right on your filing. Speak with your bankruptcy attorney about how you can minimize your property tax liability today.
Home insurance is important because it protects your property in case the unforeseen happens such as a fire, a personal injury or accident involving a visitor to your home. Since many borrowers pay their insurance via their mortgage, once they cease making mortgage payments their house becomes uninsured. Having an uninsured home leaves you vulnerable to all types of catastrophe. If a visitor is hurt on your uninsured property, you could be sued for damages. Even if you’re unable to pay for home insurance, you should contact your mortgage lender immediately. Some lenders will pay for insurance on the property just to protect their investment.
Homeowner association (HOA) fees accrued before filing bankruptcy become part of your case. However, HOA fees accrued after your bankruptcy filing remain your financial responsibility. This is why it’s important to decide when/if you want to surrender you home in bankruptcy. Remaining in your home means that you will continue to be responsible for all expenses associated with your home including your HOA fees. Fortunately, bankruptcy attorneys can sometimes negotiate HOA fee settlements which allow you to pay significantly less than what you owe.
Work with your Roseville bankruptcy lawyer to make sure you’ve fulfilled all of your obligations when surrendering your home in bankruptcy.
Categorized in: Assets