Surrender and Foreclosure

[frankies_mom]

This may be a stupid question but just wanted to ask because I am confused.

If you file a Chapter 7 and surrender your home voluntarily (and you are not behind on payments at the time) is this considered the same as foreclosure? Does your home still go up for auction etc?

Thanks and sorry in advance if this is a dumb question.

[SinkingFast]

It's gonna depend on how much equity you have whether or not the Trustee will take over or let the Lender Foreclose.

If you have substantial equity, the Trustee can take control of the house to sell in the interest of your Creditors. The Trustee would arrange to sell the house and split up the proceeds.

If you don't have any significant amount of equity, it may not be worth the Trustee's effort to sell the house. The Trustee would then abandon interest in the property, the BK Court would allow a Motion to Lift Stay, and the Lender would proceed with Foreclosure.

So it's really gonna depend on how much equity you have what will happen in BK Court.