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Questions about surrendering a house

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    Questions about surrendering a house

    I have some questions.

    We are filing Chapter 7 Sept 15.
    This is the first month we missed a payment on the mortgage which includes our taxes and homeowners Insurance.
    Should I pay some of the taxes and insurance?
    Or just wait till we file?
    What will happen if I don't pay the taxes and insurance?
    The plan will probably be to surrender the house.
    I am just so stressed over all of this.

    #2
    escrow pays ins. taxes

    Hello nomore,

    Every month you pay a little $$ into the escrow acct. Your lender pays the ins. premium and taxes with it. These are usually paid annually or bi-annually, sometimes quarterly.

    Most likely, your lender took $$ out of escrow and paid taxes and ins for the rest of the year. Contact the ins company to find out.

    Even if they didn't, there is probably enough $$ in escrow to pay ins and taxes at least one more time (they like to keep extra in escrow)

    Best way to check this is to call your mortgage company or insurance company (homeowners insurance)

    Take a deep breath, go to your happy place.......

    Hundreds of people on this forum have been through this. Lots of support.

    Once you figure out you are going to file BK, standard procedure is to stop payments on all debt. That includes house, cars, credit cards, etc. (You only keep paying on a house or car that you plan to keep through and after the BK.) With the saving of not paying your bills, you use the $$ to pay your lawyer and to move yourself to a new location.

    House foreclosure usually takes months. The process stops during the BK, so that adds 3 or more months to the process. Usually people have 6 months to a year before they have to move. That is a lot of saved up mortgage payments.....

    There is also a "cash for keys" program w/ some lenders where you sign the deed over to them, leave the place clean and ready for market, and leave as early as possible, and they pay you so they can get the property on the market as soon as possible. Some lenders do this, some don't. No harm in asking!

    Tom in Colo
    Ch7 filed 5/12/2010.....341 meeting 6/30/2010....report of no distribution 8/15/2010.....discharged 10/01/2010.....closed 11/09/2010

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