If you surrender a home in chapter 13

[magic13]

Can the bank put in a claim for what you owe, or just the value of the home. Also I heard banks rarely put in claims on surrendered homes. Is that true

[justbroke]

Here's the deal. In a Chapter 13, just about every creditor will file a claim.. especially mortgage holders. Even if you are surrendering, the mortgage holder may be entitled to payments from the Chapter 13 unsecured pool. The mortgage holder would typically file a secured claim with an "unknown" (or unspecified) unsecured portion. This way, they can modify to the correct unsecured value if the home is foreclosed upon and surrendered during the Chapter 13.

You may be mixing Chapter 13s with Chapter 7s. In Chapter 7 not asset cases, most all creditors never file a claim. In a Chapter 7 asset case, "most" creditors would file a claim. The same goes for Chapter 13s. Chapter 13s are ALL considered "asset" cases. This is why most all creditors file claims.

[magic13]

So what would be the unsecured value? What if the house is only worth 10000 and over 100,000 is owed. Secondly, if I and J says you can afford 600 in total payback does it really matter what their claim comes in at. I thought you pay what you can afford not percent to unsecured. In addition, I have no assets that are not exempt, which isn't hard to do when you are doubling the federal wildcard

[justbroke]

If you owe $100,000 on a property that sells for $10,000 at auction, the unsecured portion is $90,000. The amount they file for does not matter. If you have $600 in disposable income and are in a 60 month plan, then $36,000 would be available for distribution to the secured creditors. The lender would receive their "pro-rata" share based on what other unsecured creditors have filed.

I apologize if I implied that you need to worry about your "percentage" payback. (The only people who might be more concerned are those in a 100% -- or near 100% -- payback plan. Even that depends on the amount and the overall strategy.)

[greenthinker]

justbroke,

We are also planning to surrender our home in our Ch. 13. We are over 100K underwater, and I asked our attorney if we would be responsible for the deficiency, since we are in a 100% repayment plan with some available DMI. Without elaborating, he said "no." So, since his response does not match yours, I'm wondering if it depends on which state you live in? We are in Washington State.

Thanks!

[justbroke]

Yes. If you are in a no-recourse State, there is no deficiency by operation of law. That is why I wrote "may be entitled" above.