Costs of walking away from home in a BK

[Boscoe]

I know there have been similar discussions about this before, but let me ask this now.

If you let a home go in a bk and it gets discharged, can you be foreced to make ANY payments for anything related to the house?

--I shut off utilities
--I have not paid any further insurance premiums (please forget the liability issues for now and assume the lender obtains forced place insurance to cover slips and falls, etc.)
--I have not paid any further property taxes
--I have not paid any further homeowners fees

This is my understanding, is all of it correct?

Re: Utilities - they are shut off, so no further bills there

Re: Taxes and Water - these would be liens placed on the property that the bank would have to pay upon foreclosure or short sale

Re: HOA fees - these would be collected during foreclosure or short sale as well

Re: Insurance - bank pays now and this is included in foreclosure or short sale

I want to be sure I can just walk away from ALL of it, with not a dime paid out by me, since the property was discharged in bk. Please comment and let me know. Thanks.

[rrockinggramma]

as long as it wasn't reaffirmed, then you should have no additional liabilities for anything. In fact in looking at our chapter 7 paperwork the other day, I see we listed the county for our taxes. We discharged it all.

[BearChaser303]

HOA fees: My understanding is that any HOA fee's you owed at the time of filing are discharged, but that you are responsible for them after filing and until the foreclosure is complete. At least this is how it works where I live, not sure if it varies by state...

[Boscoe]

I know that everything owed at time of filing is discharged. I am referring to everything that comes up between the filing date and the date of foreclosure or short sale.

I am not intending on paying any of it, and of course it is not reaffirmed. Just wanted to get everyone's sense of whether insurance and HOA fees will be captured along with all other costs at time of foreclosure or short sale. That is what I want to hear.....

[BearChaser303]

My understanding, based on what my attorney has told me:

Property Tax: Responsibility of the buyer of the property at foreclosure (most likely the mortgage co.)
HOA fees: My responsibility AFTER filing and until the property is no longer in my name

As for the utilities and insurance I dont know but I think what you stated is probably correct. If you have abandoned the property (sounds like you have if the utilities are off) it seems like you might want to inform your mortgage company so that they can do whatever is necessary to winterize the house.

Just my 2 cents.

[ssdsco]

My attorney said any HOA fees incurred after BK are considered new debt and not discharged.

[Boscoe]

To respond, we don't need to winterize the house, since it is in Florida.

Regarding the HOA fees, my understanding is that if I don't pay them, they get paid by the buyer/bank at the closing or foreclosure.

When I refinanced this same property back in 2006, I had to bring the HOA fees current at time of the refinancing closing.

I don't want to pay another dime, and so far, the responses sound like I can......

[BearChaser303]

My understanding is any post bankruptcy HOA fee's that you owe at the time of foreclosure would become unsecured debt and they could come after you for it like any other unsecured debt. I suppose it is possible though that the law is different in Florida than where I am. I am going strictly on what my attorney has advised me.

[afelix94]

Unfortunately, in my case the lawyer told me that I am still liable for snow removal and grass cut even after I have just been discharged because the house is still in my name. It does not make sense to me: I am not liable for the mortgage I am just get discharged off but some code inforcement officer can drag me to their city court for not removing the snow. Go figure?

[Joe Farmer]

If the house was foreclosed you are not responsible to mow, etc.

If you have HOA debt, when you file BK they are 'priority unsecured debt' that would be paid first before certain other debt, if there were funds to pay any debts at all. Barring that, the new buyer whether the bank or etc, will have to pay all past due HOA fees to get the deed. As amazing as it sounds you can, in the U.S., simply pack up and walk out of your house and keep on walking, and let the dust settle for the lender to sweep up. That's the risk they have for receiving hundreds of thousands of dollars in interest over the course of a mortgage. Also, if you recently paid for insurance and then the place foreclosed, you may be able to get a pro-rated refund of that premium. As an aside, my sweet little HOA has decided to continue to raise the initial fee to people that buy in the area, which is now already and extra $500 at closing. All they are doing is turning away potential new buyers when they find out how shocking the total HOA fees are, yet the idiots on the board vote for that crap, too stupid to see they are harming their own property value. The scary thing is that HOA will fees ALWAYS continue to go UP, so even if you owned your place outright your monthly expenses will rise anyway!!

[Catia]

Just wondering--did you have escrow acct included with the mort??? For things like taxes and HOIns??? If yes, depending on when your policy renews, you may already be paid up--just food for thought.

I am planning to let my 1 prop go into FC (well not really planning, I don't have a choice)-I am not in full FC YET--In April, my homeowners policy gets renewed and paid in full for 1 year ahead by my escrow account funds-Escrow funds ARE there-so during FC, home will be insured right??? The mort co is responsible to pay for items in my escrow if the funds are there right??? I am asking--cuz I do have funds in escrow, and I want to know what the lender will do with these funds. IS the lender allowed to take your escrow funds and apply them to other things???