Bankruptcy and home ownership

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Bankruptcy and home ownership

I filed for bankruptcy in ct 9 yrs ago and was allowed to keep my house. I want to purchase a new home and just walk away from my current home as there is no equity in it to justify selling it. Can I do that?

Asked on June 25, 2018 under Bankruptcy Law, Connecticut

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If you kept the house, the fact that you filed bankruptcy years ago is irrelevant: you own your house, and the bankruptcy did not and will not change that. If you walk away from the house:
1) If there is still a mortgage on it and the mortgage is more than the value of the home, the lender can sue you personally for the money--and also possibly some of their costs or fees in suing you;
2) You are still liable for the taxes on it--the county or town (whomever assess your property taxes) can sue you for them;
3) You will still be liable for any and all utilities, insurance, etc. up to the point at which they are shut off, and can be sued for unpaid amounts;
4) If anyone is injured on the property, if that is in any way your fault, you can be sued;
5) If the house becomes a blight becasue you are not occupying it, your town, etc. can fine you.
In short, you *can't* walk away from a home, because you can't stop owning it UNLESS someone else takes it over from you. You could try offering it to the bank--they don't have to take it from you, but may. Or sell it, even short, to get out from under it.


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