A few years ago, I was in a pretty serious car accident. During the aftermath, I became really familiar with a lot of different types of lawyers. I worked with personal injury lawyers, insurance lawyers, and many others. Perhaps the most important, though, was the estate planning lawyer. I was really young, and neither my wife or I had thought about starting a will. But the accident kind of scared us into it. What would happen if one of us were to die? Even when still in the hospital, I was working with the lawyer to draw up a will. Now, I have some peace and security about what the future will be like if something should happen to me. And I have a lot of experience working with various types of lawyers! The accident was kind of a blessing in disguise in that way.
Chapter 13 bankruptcy allows you to gradually pay off debts under a payment plan approved by the court. Unlike Chapter 7 bankruptcy, you don't have to give up assets, and you are permitted to keep your primary home. However, if you have a significant mortgage debt, you still can surrender your primary home to the lender to discharge the debt. Here are some tips on surrendering your primary residence to the lender with Chapter 13 bankruptcy.
Fill Out the Petition
Find out if the district you live in allows surrendering property to the lender, and ensure you qualify for Chapter 13 bankruptcy. Fill out the Chapter 13 bankruptcy petition, and list all of your assets, creditors and debts. Bankruptcy petitions are available through your attorney or the local court.
When you file the papers, you will be required to file a Statement of Intention, which notifies the creditors what you plan to do with mortgaged property. On the top section of the form, list the mortgage lender under :"Creditor", include the address under "Description", and check "Surrendered" under "Property Will Be" section. Use the payment plan worksheets to devise a reasonable payment plan that includes your intention to surrender the home, then file the papers.
Attend the Creditor's Hearing and the Confirmation Hearing
Be prepared to attend a creditor's meeting, often called the 341 hearing, and a confirmation hearing. At the 341 hearing, you are sworn in, then the creditors get the opportunity to ask you questions about your situation.
In most cases, creditors opt not to attend, since they feel they can do nothing to stop the bankruptcy, but you still must attend the 341 hearing. The trustee will ask if there have been any changes in your financial situation. If you have already filed a petition, and decide to surrender the home after you file, inform the trustee you want to amend the plan.
The confirmation meeting takes place no more than 45 days after the 341 hearing. At the hearing, the judge will explain the impact surrendering your home has on your debts. The judge decides if the plan meets the criteria under bankruptcy code. If the plan gets accepted by the judge, the lender can't object the surrender.
Plan to Move
The lender will mail you a foreclosure notice, which gives the date of the foreclosure auction. You usually have up to four months to move. Plan to move from the residence before this date. Foreclosure notice can come before or after the discharge, but you still have to vacate the property.
Surrendering your primary home under Chapter 13 is ideal when you have fallen behind on payments. Before you file Chapter 13 bankruptcy, consult with a bankruptcy lawyer, such as Stuart R Whitehair Attorney.
Share23 February 2016
