Legal Question in Bankruptcy in Michigan

I have filed chapter 13 bankrupcy and it is about to be complete in april this year. Through bad advice from my lawyer I am losing my house to foreclosure I have had the option of a short sale but another lawyer from the same office has told me to surrender my home not to do a short sale I have a first and second mortgage and a buyer pending but I do not know who to beleive and I need an answer from someone outside to direct me in the right way so this hole that has been dug doesn't get deeper


Asked on 1/17/11, 6:46 pm

1 Answer from Attorneys
L. Jed Berliner Berliner Law Firm

The completion of your Chapter 13 case will give you a discharge, freeing you of any obligation on the mortgage, which is the common reason one might do a short sale.

You remain exposed to being sued as owner if someone gets hurt on your property until the foreclosure is completed. A surrender does not end your ownership; only the foreclosure does. This means that you must maintain insurance until the foreclosure is complete.

A short sale also ends your ownership. For this reason alone, the end of ownership and the end of a need to have insurance in case someone gets hurt on your property, I'd recommend doing the short sale. But, heck, most short sales don't go through so you'd better maintain the insurance until you the short sale or foreclosure is completed.

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Answered on 1/22/11, 7:30 pm


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