If you intend to surrender your home in bankruptcy, you may wonder when you need to move out.
Below are a few guidelines on when you may need to move out of your home:
First, it’s important to know that there are no surprise evictions in bankruptcy. No one will suddenly show up on your doorstep and demand that you vacate the premises. There is a transparent process that the mortgage lender must go through before they have the right to foreclose on your property in bankruptcy.
As soon as you file bankruptcy, the automatic stay is in place. This means that any foreclosure in process must cease. No need to rush your move after filing bankruptcy because the lender cannot get you out of the property with the automatic stay in place.
Motion To Lift Automatic Stay
Once the debtor states their intention to surrender the house in bankruptcy, the mortgage company must file a motion to lift the automatic stay. The bankruptcy trustee must approve this motion before the lender moves to evict and even after the motion is approved, the mortgage company must go through the foreclosure process before evicting the debtor. Depending on where you live and how backlogged the courts are, the foreclosure process could take weeks or months. This could give you an additional month or two to remain in your property.
Moving After Bankruptcy Discharge
Sometimes the mortgage lender takes no action until after the bankruptcy discharge. Once your bankruptcy is discharged, the automatic stay will lift for any secured property. This means that the lender can begin the foreclosure process again if you’re not making mortgage payments. It’s advisable that you move out of your home before the bankruptcy discharge if you don’t intend to keep the property.