Surrender of rental property

[Tom_Mi]

Hi again,
First, I promise this will be my LAST question for a while! I'm really sorry to dump all my questions on you but I've spent months agonizing over my situation without knowing this board existed.


If I simply surrender all my rental properties before the bank re-sells them, does the CH13 court:
-only have me pay back the payment arrears about 10k
-or-
-wait (months?) till the bank sells them short and then incorporate the difference (100k+ ....the reason I'm here) into the plan?


If I elect to strip any liens/2nds that amount WILL get built into the plan, right?

Again thanks!!!! for being here and for all your comments!

[rrockinggramma]

Lein stripping is not something that happens in Michigan (at least in any of the court cases I have reviewed) and the burden of proof to get it to happen is mind boggling. If you surrender the properties then the bank forecloses and the difference between owed and sold for becomes unsecured debt which is paid back in your chapter 13 according to the percentage to unsecured set in your plan. So if percentage is 10 percent to unsecured, then that is all they would get. AT the end of your plan, the rest is discharged. The bank would have 60 days to file their claim. So probably they would file a claim and then amend it when the real cost is known to make the deadline. But you can object to their claim if you think it higher amount than it should be etc. After the deadline, it is up to the trustee if a late claim is accepted. In Michigan, the lender would file for relief of stay so the property can get sold, the trustee would sign off and say if any profit, it all goes into the BK estate.