What does surrender mean in bankruptcy?

When you surrender property in Chapter 7 bankruptcy, you essentially give it back to the creditor. When you surrender the property, the creditor’s lien is removed. When you get the bankruptcy discharge, your personal liability for the secured loan is wiped out.

What happens to a Chapter 7 bankruptcy case after a discharge?

A Chapter 7 case will remain open after the discharge if the Chapter 7 trustee appointed to the matter needs additional time to sell assets or if the case involves litigation. In many Chapter 7 cases, the debtor keeps all property because the debtor’s assets are exempt.

What happens if I Surrender my House in Chapter 7 bankruptcy?

Many debtors decide that they can move to a comparable place and pay less. If you are upside down on your house, Chapter 7 provides a simple way to walk away from it. Keep in mind, however, that in some cases, you can eliminate a junior mortgage in Chapter 13 bankruptcy. You don’t want to keep the house.

Can a debtor be discharged under the Bankruptcy Code?

Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. Section 523 (a) of the Code specifically excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy.

Can a bankruptcy debtor request a hardship discharge?

Although a chapter 13 debtor generally receives a discharge only after completing all payments required by the court-approved (i.e., “confirmed”) repayment plan, there are some limited circumstances under which the debtor may request the court to grant a “hardship discharge” even though the debtor has failed to complete plan payments.

What happens when you surrender property in Chapter 7 bankruptcy?

When you surrender property in Chapter 7 bankruptcy, you essentially give it back to the creditor. This is the simplest method of dealing with secured debt and property in Chapter 7. When you surrender the property, the creditor’s lien is removed. When you get the bankruptcy discharge, your personal liability for the secured loan is wiped out.

What happens if you leave out a debt in a Chapter 7 bankruptcy?

If you unintentionally fail to list an unsecured debt in a no-asset Chapter 7 case in this district, the debt is still discharged. You do not have to reopen the case to add the debt. However, if you leave out a debt secured by property ( e.g., a car loan, mortgage, etc.), it may not be discharged.

What to do when a debt is discharged in bankruptcy?

If a creditor contacts you, inform the creditor that the debt has been discharged in bankruptcy and give them your case number. If the creditor continues to contact you, let your attorney know.

Can a junior mortgage be eliminated in Chapter 7 bankruptcy?

If you are upside down on your house, Chapter 7 provides a simple way to walk away from it. Keep in mind, however, that in some cases, you can eliminate a junior mortgage in Chapter 13 bankruptcy. You don’t want to keep the house. People have both personal and financial reasons for wanting to surrender a house.