Because foreclosure filings are so far behind right now, it could be several months before the mortgage company actually begins the foreclosure process after you stop paying. In one case, I have a client who is still in their home over a year after we filed their bankruptcy and gave up the house.

A lot of people want to move out of their home after bankruptcy. The reason is closure. A fresh start means a fresh start and sometimes you just want to walk away from the home as part of the fresh start process. But this isn’t the smartest thing to do.

If you own a home and have homeowners dues, in the State of Washington, you remain responsible for the homeowners dues that accrue post bankruptcy. In some cases, that can be $300.00 or more per month. Until your name is no longer on title AND you have abandoned the proprty, you are responsible. The only way to get your name off title is to either sell the property or have it foreclosure on by the bank. The bank has no interest in foreclosing on your home because they already have a wealth of inventory and they don’t want anymore. Plus, if they foreclose, but can’t sell the home, then they are stuck with the homeowners dues. So, the bank is in no hurry to foreclose on your home.

It is smart to stay in your home until you are told to move out by the bank or the new owner. After your bankruptcy is finished, don’t move out. Stay in the home. Pay the homeowners dues. Think of it as rent. $300.00 per month is pretty cheap rent for the house you are living in.

I recognize you probably want to move out and get away, but this isn’t the smart move. Financially, you will be more prudent by remaining in the home, paying the homeowners dues, and then eventually moving out when the bank has finally sold the home. In the meantime, you have probably built up a nice little nest egg to pay for your moving expenses and other costs. If the bank takes a long time, you might even save up enough for a downpayment on a new home! Since it is a buyers market, this might be the smartest thing you can do.

Jay S. Jump
Jump Law Group
Kent, WA