Filing Bankruptcy When You Own a Home

If filing bankruptcy when you own a home there are generally two few options, keep the home or get rid of the debt. This article will focus on the options for surrendering the property in bankruptcy. If you would like information on the options to keep your home instead of surrendering it contact us to schedule a free consultation with a bankruptcy attorney in Tampa. Each case is different, and we can help develop a comprehensive game plan for bankruptcy based on your specific goals.

Filing Bankruptcy When You Own a Home

Most homeowners who file Chapter 7 choose to surrender their home because they can no longer afford the home.  Filing bankruptcy when you own a home triggers a requirement under bankruptcy law  to file a “Statement of Intention”.  The Statement of Intention is intended to advise the bankruptcy court how you intend to handle the home. Some of the options for filing bankruptcy when you own a home include: reaffirm, modify loan, or surrender your home. See bankruptcy law 11 U.S.C. § 521(a)(2)(A).

If you choose to surrender, you can escape personal liability on your mortgage.  Now you may be wondering, what does surrender mean?  When would I have to move out of my home if I choose to surrender?  That has been an issue for bankruptcy courts in Florida for over a decade because “surrender” is not defined anywhere in the Bankruptcy Code.  However, the issue was recently decided on here in the Eleventh Circuit Court of Appeals (which controls Florida bankruptcy courts). It is important to note, each situation is different and you should consult with a bankruptcy attorney if you have questions about a specific case. Many bankruptcy lawyers in Tampa will offer a free consultation and you should take advantage of that service.

Filing Bankruptcy When You Own a Home and a Foreclosure Case has Been Filed

For years, courts have been trying to find a way to deal with debtors (borrowers) who choose to surrender their home in Chapter 7 and then change their mind, decide they want to keep the home, and defend the foreclosure action that starts after their bankruptcy case is closed.  However, in a recent bankruptcy case, the Eleventh Circuit Court of Appeals concluded that debtors who choose to surrender their home are not allowed to oppose, defend, or interfere with the foreclosure process. See bankruptcy case Failla v. Citibank.

The debtor first surrenders their home to the trustee, and if the trustee does not want the property, the rights go to the secured creditor to take possession of the property.  A debtor is not able to state something in one court, and then change their mind in a different court down the road. This is one of the many reasons why it is important to hire a bankruptcy lawyer to assist you. Filing for bankruptcy requires careful consideration and planning to maximize the advantages and limit the downside to bankruptcy.

How Soon do You Vacate Property if Filing Bankruptcy When you Own a Home

Under Florida bankruptcy law once you choose to surrender your home, you may not be allowed to keep living in the home while waiting for the foreclosure process to complete. See Taylor v. AGE Federal Credit Union. The Eleventh Circuit did not specify when the debtor needs to be out of the surrendered home. Instead, the key point is that the debtor is not allowed to stay in the home once it is surrendered. Further, the debtor is not able to change his or her mind once the bankruptcy is closed. This area of bankruptcy law is rapidly changing, you should contact a bankruptcy attorney in Tampa for more information.

Bankruptcy Law Firm in Tampa

At Florida Law Advisers, P.A., we understand that filing for bankruptcy can be a very confusing and intimidating process.  That is why we work so hard to make the process as easy as possible for our clients. When you hire Florida Law Advisers, P.A., you have an experienced Tampa bankruptcy attorney by your side throughout every phase of the bankruptcy process. To schedule a free consultation with a bankruptcy attorney at our firm call us today at 800 990 7763.

Frequently Asked Questions

Can I keep my home in bankruptcy?
Can I keep my retirement account in bankruptcy?
Will I lose my car in bankruptcy?
Will I lose assets in Chapter 13 bankruptcy?
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