Leaving Your Home Before Foreclosure Completes

Author: Alexander Littlejohn/ Date: April - 26 - 2011

When the foreclosure notice comes is often when things really begin to change for most folks. If they havent already decided to file for bankruptcy, they usually take a lot closer look when the official notice comes. Unfortunately, under the current economic conditions and housing crisis, the foreclosure process has become a long and drawn out process some times taking up to two years in some places to complete the eviction of the owners and the sale of the house. This is good news to some, bad news for others.

For those who want to stay in and keep their homes, filing bankruptcy may be their only choice for keeping it. For others, they may take advantage of the long eviction and sale stats in order to save money until they find a new place to live. Still, others may want to leave their home long before the foreclosure process is complete. It is this latter group which this article will address. What happens when you leave your home before the foreclosure process completes?

What happens depends on what state you live and whether you file for bankruptcy or not. State laws usually govern abandonment of homes, and the issues are legally defined by a civil law contract held with the lender, by tax laws, and by liability laws. Handing the keys over to the lien holder without understanding the various laws could be a mistake in the long run.

First of all, without bankruptcy protection, abandonment of the home could lead to a lawsuit filed by the lender in a civil court of law. Depending on the circumstances, the lender could file for the deficiency that was not collected after selling the home. Other compensation, if a civil suit is successful, may be awarded as well.

Secondly, the tax burden goes with the house, but your obligations to pay the property taxes do not end until the deed has been properly transferred. If you have been defaulting on your payments, which include escrow money for taxes and insurance, you still owe the back taxes on the home. Many taxes are not exempt or cannot be discharged in bankruptcy filings.

Lastly, you really need to consider liability laws. If you have defaulted on a loan and your insurance has run out on the home, and something happens to the vacated home or someone gets hurt on the premises, you may be held liable for the situation. Your liability will continue until the deed has been transferred from your name, and without insurance, some of the payouts on liability claims can be horrendous. In addition, certain liability claims may not be considered exempt when filing for bankruptcy.

These are just a few of the legal issues you could run onto when leaving a house before the deed has been transferred. Just because a lender has filed his intent to foreclose does not mean you lose your liability to sustain certain obligations to home ownership. There are other issues involved when abandoning a home that are just as complicated as the various laws involved.

What things can you legally take out of a home when you leave or abandon it? The general rule of thumb is whatever came with the home when you bought it usually stays. Appliances are a good example. If the home came with a refrigerator, and you have replaced the original with an upgraded model, your responsibility ends with replacing like for like. In other words, you can replace the old refrigerator with a like model type and keep the upgraded version. Also, any permanent improvement made on the home has to remain with the home.

As you can see, the laws surrounding home ownership are as complicated as bankruptcy laws. When you combine the two, you really need the counsel of a lawyer to help you understand how these complex laws might apply in your particular situation.

If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of Jacksonville, Florida, contact us here today at . We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

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