Many homes around the United States were abandoned during the last housing bubble. People who declare bankruptcy after leaving one of these homes will still be responsible for those properties and their debts. Bankruptcy law states that those who own such properties known as zombie mortgages will still be liable for those properties.
Zombie mortgages often develop because owners were unable to pay off the charges associated with them. This is especially commonplace among properties that declined in value. The worst part is that these properties were never foreclosed upon even though the lenders attached to these homes could have done so.
You will be held liable for the charges associated with zombie mortgages if you file for bankruptcy and your name is attached to any of these properties. You will still be interpreted as the owner of that property, thus requiring you to place it into your declaration. Remember, the foreclosure process might have never actually taken place, thus meaning that you must still pay off the charges associated with the mortgage.
There are many crucial concerns that must be understood when looking at this aspect of bankruptcy law so you can be fully prepared before getting a case taken care of the right way:
- You may still be held liable for cleanup and maintenance costs associated with your property. This comes as you have your name removed from the old property provided that you follow the proper filings. This comes as the bankruptcy may allow you to remove the property from your name but you will still have to pay for charges to repair it so it can be offered on the market once again.
- Old property taxes that you failed to pay off may be added to your filing. The total charges you’ve dealt with in this instance may not be fully covered in some cases.
- There are times when the property may not even be included within your bankruptcy filing, thus meaning that you are still liable for expenses associated with it. This comes from the value of that property potentially having declined to where adding it to your filing would result in next to nothing.
You must be cautious when getting a bankruptcy filing prepared in the event that you abandoned a property in the past for any reason. Remember that just because you have abandoned a property does not mean that you will no longer be liable for the expenses that you incurred on this space.