How do we deal with lender placed insurance? 7 Answers as of January 20, 2012
I had chapter 7 bankruptcy in April 2010. We surrendered our house with it. We carry a rider on our renter's policy covering liability if someone gets hurt on our old property, to protect us. The past 2 years we have gotten a letter from the lender saying they placed hazard insurance in our name since I stopped our insurance once the debt was discharged. Are we responsible for paying this lender placed insurance which costs 3-4 thousand yearly? Our bankruptcy lawyer basically told us it was the lender's issue if they wanted to tack additional debt on to the loan since we have been discharged. We have never gotten any bills to pay and it's not on our credit reports that we owe, have not been paying, etc. Since this is the second letter we've gotten I'm a little nervous that we are building up this additional debt that is going to come back to haunt us. We did move out and after about 6 months they changed the locks on the house. Does that mean they have taken over responsibility? It has not been sold that I know of, I'm just not sure how to check and see if it's out of our name.Free Case Evaluation by a Local Lawyer!
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Ashman Law Office | Glen Edward Ashman
Call your lawyer. The letter from your bank may be a discharge violation and he can address that.
Answer Applies to: Georgia
Replied: 1/20/2012
Eranthe Law Firm | Cate Eranthe
You need to go to the County Recorder's office and look up the property to see whose name is on title. If they changed the locks they should have transferred title but you need to check and see.
Answer Applies to: California
Replied: 1/20/2012
Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
Your attorney is right, they can tack it on, but you are not responsible for paying it. You should check at your county register of deeds and see if a "sheriff's deed" has been recorded, that shows that they have taken the house back and foreclosed on it. If not, or it doesn't show that it has been transferred into the mortgage company or someone else's name, you might want to look at getting some kind of umbrella or liability insurance in case someone falls and is hurt on your property. You should also know that some areas still hold you responsible for mowing the lawn and making sure that there is no blight or they write you a ticket. Good luck, I hope you find that they did the foreclosure/transfer!
Answer Applies to: Michigan
Replied: 1/20/2012
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Your lawyer can find out if you own it by calling the local title company's customer service.
Answer Applies to: California
Replied: 1/19/2012
The Law Office of Darren Aronow, PC | Darren Aronow
It would only be out of your name if the lender had the foreclosure sale and they would have either sold or taken the property back. Technically you are responsible for any post petition debt that accrues after the filing of your bankruptcy, but lenders rarely seek to collect for this.
Answer Applies to: New York
Replied: 1/19/2012
Diefer Law Group, P.C. | Abel Fernandez
This issue has been coming up more and more recently. You are discharged from all of your debts as of the time of filing. However, any debts that occur after that day are still your debts. The issue is that the contract you signed should be voided. Thus, if you have an agreement that if you did not have insurance that the lender would purchase it for you the lender is now saying you owe that amount for periods after you filed. But I believe you have the right to object because the contract for purchase of the home should be voided by your bankruptcy filing. Hence, you should not be liable for any of the terms in that contract including any insurance the carrier has to purchase. I would stand firm on the issue that you do not owe them money because of the original contract being voided.
Answer Applies to: California
Replied: 1/19/2012
