Giving up the house in Chapter 7

[imbarbara6]

Went to see the first lawyer yesterday for a free consultation. Decided I didn't care much for him because on nearly every question I asked he seemed to search his brain for an answer and then seemed as if he wasn't sure and he kept looking at his watch. Granted it was "free" but I still have the right to ask questions, etc. I felt he may have answered at least one question incorrectly.. I asked him how foreclosure would play during the Chapter 7 BK. Because I thought even though we are filing Chapter 7 the mortgage company would still go through the normal foreclosure process. He stated they wouldn't and instead we would just surrender the house and that would be the end of it. Confused me all to heck and made me think more than twice about him. Is he wrong? We live in California.

[roozterdvx]

no expert here but it's my understanding that the mortgage holder/servicer still has to go through the foreclosure process fully to secure it's interest against any other liens and to legally transfer the property out of your name(s).

[StartingOver08]

Yes, the bank has to complete the foreclosure process to eliminate the jr liens and to get clear title.

[imbarbara6]

Thank you! Can you please tell me this? We file bankruptcy, the mortgage company proceeds with the forclosure process. At some point we are going to need to move out. Say forclosure ends before the bankruptcy is discharged or closed. How does that play out with the Trustee since we are going to have to move and rent will most likely be less than the house payment and we will need funds to actually move out on?? Will the trustee allow us to save money for this purpose?

[StartingOver08]

The foreclosure process is delayed while you are in bankruptcy. In order to proceed with the foreclosure, the bank has to file a motion to lift the automatic stay.

So you will have notice when the bank is lifting the stay and you will have notice for every step of the foreclosure process.

In my Ch 7, the bank didn't even bother to lift the stay. As a matter of fact, I am still here waiting for the final judgment. I am taking advantage of my 'free rent period' to build up savings to move. Don't move too soon - it does not hurt to live in the property and take care of it while you are getting back on your feet. This may be the only time in your life that you can live somewhere and not pay a mortgage or rent payment.

[AfraidOfBK]

yes, BUT -

1. what if the foreclosure process is completed before your filing date?

I understand that if the foreclsoure process is not done, even if it has just started, it will be delayed by the automatic stay. then, per normal procedure the stay will wither be lifted or as in StartingOver's case, they wont even bother. After this point, does the foreclsoure process play out normally or do they "rush" it since they know you've surrendered the home?

Say I surrender the home in BK 7, get discharged and the foreclosure process is NOT DONE YET, but I have to move. THen what? Do I still have to pay hoa fees since its still in my name? what about homeowners ins since Im not living htere any longer (and its usually escrowed anyway)

I like living here for free and dont mind paying whatever is necessary to uphold the place - but once i move, paying rent AND hoa fees on the house i no longer live in is hard to swallow. Has anyone gone through this?

[imbarbara6]

And what if the the bankruptcy is not yet discharded or closed when the house is finally foreclosed on and we have to move. How does one go about saving money for the big move while chapter 7 bankruptcy is still open? I'm afraid we will not have any funds to move out on since the way I understand it is the Trustee doesn't want you to save. Or maybe I'm wrong and missing something. ??? I donno.

[OKBK]

nobody on here is going to tell you to commit fraud. I think you know what you have to do.

[imbarbara6]

Okkaayyy