Got CHECK from Insurance Company

[bkaz]

Got check from Safeco for Homeowners insurance. They say they won't insure the house anymore because it is vacant. They are giving me the remaining premium that was already paid.

I am in Chapter 7 and am surrendering the house. I filed on 2/17. Can I cash this check? Will I owe anyone for this post-petition?

I don't want to pocket the money and then be on the hook for it?

Also, am I required to have insurance on the house even though it is included on my Chapter 7 as surrender?

Please let me know what I should do.

Thanks.

[helpinfla]

You are most certainly supposed to have insurance on the house. You really dont want to take a chance and have something happen. Keep insurance on it until its officially not your house.

[BCA2009]

There are mixed opinions on this. Do some research. there have been a number of threads about this recently. Then decide what is best for you. The bank can't get that insurance money back from you. So you can cash it. You have to decide how much risk you are willing to take by not having the house insured. Once you are discharged you have no liability to the bank, but as long as the house is in your name you are liable for accidents that may occur on the property (if you are sued).

Once I stopped making payments on 2 baots and a truck that I was surrendering in BK, I dropped the insuance on them, but I also stopped using them altogether. Had my case been dismissed rather than discharged and something happened to them (Tornado, Stolen, etc.). I would have been liable for the full balance owed.

If I had a house that I was surrendering, I would probably try to keep it insured until the discharge, but after that, I would only keep a liability policy on it until the title was out of my name. I might not even do that. It is a risk decision. I have never personally known anyone that was sued due to an accident on in their home. It might happen to me tomorrow, but in my opinion it is very unlikey.

As a matter of fact, I do own an empty lot on a canal. I am surrendering it in BK, but it is technically mine until it is foreclosed on. I have never had any liability insurance on it. I guess someone could fall off the seawall and drown, then their family sue me. But I know lots of people with residential lots and farmland and none of them have liability insurance on them. But someone could step in a hole, break a leg and sue them.

It is all a matter of risk you are willing to take.

Good luck!

[bkaz]

OK, so the only reason I really need it is in case I'm sued?

I haven't lived there since late 2008 and nothing has happened yet, the place is just like I left it.

I'm just praying the bank takes it out of my name very, very soon.

They filed a relief from the auto stay so maybe they will move on it?

Thanks for the replies.

[frogger]

Many lenders will "force place" insurance on any property that does not have it. They will then bill this to you and bk should take care of it.

If it's vacant, give them possession, give them keys.

[bkaz]

OK so even if they bill me post petition it will be covered because I am surrendering the property to them?

Also how do I give them the keys? Walk into a chase bank and hand them over?
Thanks.

[BCA2009]

OK so even if they bill me post petition it will be covered because I am surrendering the property to them?

Also how do I give them the keys? Walk into a chase bank and hand them over?
Thanks.

Correct, just like interest, late fees, attorney fees, etc. They can "add" anything they want to your account balance, but once you are discharged it all goes away.

[bkaz]

Thanks.

So if I left the house in late 2008 and have missed about 14 payments and now went into Chapter 7 and Chase filed a relief from the stay, does anyone have any guesses has to when the bank will actually foreclose?

Could it be another year? A few more months?