Ch13, surrender house and huge deficiency

[elster]

If I surrender house and payback other debt (CC) in 100% plan what happens with the negative equity in the house? Is it forgiven since I am surrendering, or can the lender come back in the middle of my 13 plan and pursue for the deficiency?

The house is a ways from being auctioned but the 13 plan could be set up before this happens. I am wondering what happens if they try to pursue for deficiency, or if the lender doesn't bother if I am in a 13.

[SiftedLikeWheat]

You will have to have a market valuation done on the house (my realtor did mine from comparables) to determine the amount of the secured and unsecured debt. The unsecured debt amount will be listed and added to all your unsecured debt. The current debt limit for Ch 13 is somewhere around $330,000. Your attorney should know this amount. The house is "surrendered" in BK. If it does not sell, it will eventually be foreclosed on. The BK will stay the foreclosure, but your lender(s) will file a motion for relief of stay. You usually just ignore that, and the stay will be removed. Your mortgage company becomes just another unsecured creditor and cannot come after you for a deficiency as long as your 13 is sucessfully discharged. I am not a lawyer; this is my experience, so discuss it all with your attorney. Also, my home was in CA where they usually pursue non-judicial foreclosure.