Should I Keep Paying My Homeowner’s Insurance After Filing Bankruptcy?
By Susanne Robicsek, North Carolina Bankruptcy Attorney on Mar 17, 2009 in General Bankruptcy Information, Life After Bankruptcy
Many people surrender their homes to their lenders when they file for bankruptcy but as long as the property is titled to them, they may have some risk if someone is hurt on the property. As long as the property is in your name, your homeowner’s insurance would protect you from liability.
It may be a good idea to keep up your liability insurance on property you own until after title has passed to a buyer or the bank, even if you plan to walk away from it in a bankruptcy. When you file for bankruptcy, you are being released from the legal obligation to pay the debt on the house, but you may be responsible for debts that arise after filing.
Homeowners insurance is usually fairly inexpensive and could protect you if someone is hurt on the property. You should, at the very least, notify your mortgage company, in writing, that they need to insure the property if you allow it to lapse so they can protect themselves.
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