Is there a way to legally unload a property after bankruptcy? 9 Answers as of July 12, 2013

I 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.

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Daniel Hoarfrost, Attorney at Law
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
Replied: 6/8/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
You may want to consider filing a Deed in Lieu of Foreclosure. This would allow you to deed the property directly back to the Lender ending the uncertainty that you are currently facing.
Answer Applies to: New Hampshire
Replied: 6/8/2011
Law Office of Maureen O' Malley
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
Replied: 6/8/2011
Bankruptcy Law Office of Robert Weed
Bankruptcy Law Office of Robert Weed | Robert Weed
Right. You laid out the problem really accurately. There's no very good solution. How expensive would it be for you to fix it up, so you could rent it again, to get enough to cover your costs.
Answer Applies to: Virginia
Replied: 6/8/2011
Marilyn J. Hochman
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
Replied: 6/7/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    This is the bad news. You are stuck. And you are stuck with post petition expenses such as code enforcement citations. You can't make them take it back.
    Answer Applies to: California
    Replied: 6/8/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Your question makes it sound like you did not have a lawyer (BAD mistake) as a lawyer would have gone over pros, cons and options and still can assist you.
    Answer Applies to: Georgia
    Replied: 7/12/2013
    Bankruptcy Law office of Bill Rubendall
    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
    Replied: 6/7/2011
    Greifendorff Law Offices, PC
    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
    Replied: 6/7/2011
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