Posts Tagged ‘include a home in bankruptcy’

Including A House In Bankruptcy

When it comes to including a house in bankruptcy, there is a set procedure that you need to follow. You need to do some basic preparation in advance. While you are filing your petition for bankruptcy, you will have to make sure that all of the information regarding your mortgage lenders and regarding your home are thoroughly updated. You will have to decide in advance much before you file the petition whether you want to surrender the house in the bankruptcy or you want to keep it. Your further course of actions must be planned accordingly. All these factors will help you determine how exactly you should handle your case and which type of bankruptcy is the most suitable for you.

Mortgage Liens

The first thing you have to do is to gather all necessary documents related to your house, such as mortgage bills and other types of liens on that property. Your bankruptcy lawyer will need the copies of all those bills to suggest you about including a house in bankruptcy. The lawyer needs the information provided on the bills to update the petition for bankruptcy. Even if you have not hired a lawyer and are handling things on your own, you will need to have all of this information in hand for reference.

Obtain The Bankruptcy Forms

You can obtain the required bankruptcy forms by downloading it from the official website of the US courts. Before you start filling out the forms, it will be better if you get the property value of your house through appraisal by an experienced real estate appraiser. Make sure that the appraiser you are hiring is duly licensed to perform such appraisal in your state. In the schedule A of the bankruptcy petition, you are required to type the physical address of the property. The information that you need to provide in Schedule D includes the current property value of your home, the type of lien on that property, the current outstanding balance on the loan, and the name and the contact details of the creditor.

Reaffirming The Debt Vs Surrendering The House

When it comes to including a house in bankruptcy, there are two choices available for you – you can either choose to reaffirm the debt or choose to surrender the house. Choosing to reaffirm the debt means you are showing your willingness to keep the home by continue making mortgage payments for the remaining outstanding balance even after you go bankrupt. On the other hand, when you choose the house to be surrendered, it means you do not want to keep your house anymore and you do not have any objection if it is sold off to settle your debts as part of the bankruptcy liquidation process. If you are filing your petition under chapter 7 or chapter 13 of the bankruptcy code, you will find a specific section in the form, namely ‘Individual Debtor’s Statement of Intention’. You are required to type your choice in this section.

When you submit the bankruptcy forms with all this information, it will let the creditors, trustee, and court know whether you are including a house in bankruptcy or not.

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