Is there a way to legally unload a property after bankruptcy? 9 Answers as of July 12, 2013I filed Chapter 7, but still own a rental property. The bankruptcy case was discharged already, but hasn't been closed, and we have no way to find out when this will happen. The property has been boarded up, but is continuing to incur taxes and other penalty fees on the house. We have been told that those fees can easily be transferred from the property and turned into a judgement against us (in which case we would be liable to pay them, regardless of the bankruptcy). We have also been told that we can not sell the property without the approval of the entities that hold those debts on the property, and would not likely be able to sell the house due to the condition and neighborhood. We have also been told that these entities do not have to foreclose - they can continue to hold the debts in hopes that the owners will get another job, allowing them to garnish wages indefinitely to collect those debts and any new debts that are incurred. It's unethical, but we can't find any course of action that will result in the close of the bankruptcy case or result in a foreclosure of the property or some other removal of the property from our name.
Daniel Hoarfrost, Attorney at Law | Daniel Hoarfrost
If your bankruptcy case is still open, the question is whether the trustee wants to assert an interest in the property. If not, you should ask him to "abandon" the property. That will clear your title and you can sell the property or quit-claim it back to the lender.
Answer Applies to: Oregon
Law Office of Maureen O' Malley | Maureen O'Malley
First, the lender cannot collect any money from you on the property since you filed bankruptcy. Lenders have been increasingly unwilling to foreclose because they also can't sell. It's possible that the taxing authorities in your jurisdiction, or the HOA, might be willing to foreclose. I don't know why you can't sell without permission of those entities, unless they have a lien, and the liens would be paid from the proceeds of the house. This is a giant problem in bankruptcy law and I'm sorry you're having to go through it.
Answer Applies to: Virginia
Marilyn J. Hochman | Hochman and Peppler, LLC
You don't mention whether there are any mortgages on the property. If not then you can always give the property away...maybe habitat wants it? If there is a mortgage, and you are not paying it and a foreclosure has been held up by the bankruptcy stay, you will not be liable for any further debts from the property. The taxes will accrue and be sold by the tax collector. Eventually the tax certificate will be sold. Without more information I can not give you any more precise answers.
Answer Applies to: Florida
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
Once you have received your discharge your personal liability on the loans is no long owed. Tell the lender you want to give them the deed in lieu of foreclosure or instruct them to foreclose. Drop the insurance, don't pay the taxes and don't mow the lawn. Give the lender the keys. Notify the police that the property has been abandoned and the lender has the keys. If all else fails sue for the maximum in small claims court (you won't get much of a result there but you would get the lender's attention.)
Answer Applies to: California
Greifendorff Law Offices, PC | Christine Wilton
If the mortgage debt for that rental was included in your bankruptcy case, then that debt and those fees are discharged. You should contact the lender and let them know your intent is to surrender the property and ask them the best way to transfer this property to them. If you can get a short sale buyer on the table to take the property 'as is' then you can get the bank to cooperate. Sounds like you're going to need to get active to unload this property.
Answer Applies to: California