Surrendering house after Chaper 7?

[kmp2205]

My husband and I are thinking about surrendering our house. We are about a year out of our discharge of debt. We are completely upside down in our house and realized if we can get out now we should maybe run for the hills. We live in Michigan... are there any rules to this? Are their consequences? The bank is sending us foreclosure notices but the house was discharged in the bankruptcy.... just need some guidance. Thanks!

[Snax]

My understanding is that while the debt can be discharged, the mortgage company still retains the lein after BK. So unless you have an agreement with them to stay in the home by either reaffirmation or ride-through, prepare to move. Even if you have been keeping current on payments, unless you have reaffirmed, they can foreclose any time they want with proper notice.

[CCsAreEvil]

We are completely upside down in our house and realized if we can get out now we should maybe run for the hills... The bank is sending us foreclosure notices but the house was discharged in the bankruptcy.... just need some guidance. Thanks!

That's interesting. Obviously, if you are upside down in the house, probably doesn't make much financial sense for you and your family to stay there, especially if you can find a home to rent for possibly cheaper.

You mentioned being completely upside down, but are you keeping up/current on your mortgage payments? It does not sound to be the case. If you are current, would be hard to believe the bank is sending you foreclosure notices. But, it is within their power to do so I suppose. If you "are" behind, IMO, I would stay as long as possible and save all that money that would otherwise be going to the mortgage payments. Use these funds for your next place to rent (+1st/last/deposit/etc) and as savings for a rainy day. Good luck.