I can't believe we're in this mess :(

[oregonpilot]

I am adding mine to thee...Des. Reading your post helped me know that i wasn't going crazy or probably wouldn't be going crazy in the future. Thank you!!

Memama.....good luck to you. Its gonna be OK!! Just hang in there. I think when you get in touch with your atty things will work out.
ALSO..the best to you in your move.

[btbeme]

There has also been no guidance whatsoever on surrendering our house so we have no clue what to expect there. I think it's highly unlikely that anyone will ask any questions as the assessor's office assessed our house at $160k and we owe $230k, but our attorney failed to explain to us from the get-go that while the bankruptcy discharges our debt, it does not release us from the house-the bank will still have to go through a foreclosure. At least, that is my understanding of what happens. This is an issue because we're moving out of state ASAP, so we won't be here to maintain the house. Any direction or past posts about situations like this? Despite my thoughts that surrendering a house might become more common, there is still relatively little information out there regarding the process and what happens...

This subject could fill a book. I'll try to summarize your options, and then you can ask questions for us to answer.

Option 1 - do nothing. Don't pay, move out when you are ready. You might be responsible for HOA dues and possibly insurance (there are discussions about both of those obligations). Eventually the bank will foreclose and sell the house, probably long after you are gone. If they determine that you or someone else trashed the vacant house then they might try to come after you for damages. This is fairly rare because it is costly and complicated.

Option 2 - Do nothing, stay until thrown out. This is the option most people take - they stay until it is really time to leave. Free rent and all. Also helps to keep the place from getting turned into a crack house. You will get plenty of notice as to when the auction is, etc so you can plan your move.

Option 3 - apply for a short sale. A good and experienced short sale specialist can not only sell your home (with the bank's agreement) but also get you up to $3000 in cash for your trouble. This does involve a fair amount of exercise to do, but if you are moving anyway, this might be fairly simple for you.

Option 4 - offer the bank a Deed in Lieu. This will (should, anyway) get the house out of your name much more quickly than the other options. You tell the bank that you are leaving and offer a Deed in Lieu according to the schedule that is convenient to you. Most banks will accept, especially if you are moving anyway and they think they can sell the property fairly easily (it isn't trashed, etc)

In short, yes, your attorney is correct - you don't have a financial obligation to the house after discharge but you do have some remaining responsibilities because of the deed. Anything that can cloud that deed - a lien applied by the HOA for non-payment of dues, or a suit from someone cutting themselves to ribbons while breaking in a window - can come back around to you, so getting off the deed in a quick and responsible manner can be a big help. And, the clock for qualifying for a new mortgage does not start ticking until the last shoe drops, whether that be your BK filing or getting off the deed.

Last thing - you can't try the short sale or deed in lieu until after your discharge.

[Pandora]

.... It was not until I began reading posts on this site (and then posting) that I truly grasped what the person sitting across the desk from me was facing and thinking. ...... This forum has put a face to the emotions and fears consumers tend to have, so much more than I could have ever imagined in my small world.

Des.

and that m'dear is what makes you... you. Class act. Thanks for trying to view from the "glass is half empty" side of things. It does make it much easier for the person sitting on the other side of the "big scary lawyer"

Hugs to ya big guy