If you filed bankruptcy and can't afford to keep your house (payments too high
for your income), how long should you stay there?
As a part of your bankruptcy filing, you'll tell the court that you're surrendering
your house to the lender. What then?
Until the house is sold (or taken back by the lender) at a foreclosure
or other sale, you are the owner of the house and responsible for all the issues
of ownership. These issues include loss by fire (keep it insured),
loss due to someone being injured on the property (keep up the liability insurance),
maintenance as required by the city or county (you can be billed for it if they
have to do it) and other items.
That's why I recommend to my clients that they stay in the house until
it's sold. You're getting a rent-and-payment-free house to live in
and the lender benefits from the house not falling into disrepair. It's a win
for both parties. When the lender is ready, they can foreclose and you will
then have to move.
How long will it take for the lender to foreclose and sell or take back
the house? There's no way to know. It depends on the lender and its
desire (or lack of desire) to deal with your house in a foreclosure sale at
any particular time. It may be soon or it may be a year or more in the future.
It's on their schedule, not yours, but in the meantime enjoy your house.
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