25 Feb Did You Know That You Can Be Arrested in Conjunction With Surrendering Your Home In Bankruptcy?
Just because you surrender your home in bankruptcy or you think your home has been foreclosed upon you can be arrested in relation to your property. It does not happen very often but as more properties are being foreclosed upon I think the probabilities of arrest will increase.
If you surrender a home in bankruptcy the mortgage will be discharged but your responsibilities with regards to the house do not end there. You are still the legal owner of record until the house has been foreclosed AND the foreclosure has been recorded. What this means for you is that you are responsible for the care and maintenance of the property until a new owner has been recorded in the Recorder of Deeds office. So if the city inspector passes by the house and sees that weeds on the property are too high, the city is going to issue a ticket for violating that ordinance. The noxious weed ordinance is the most common ordinance issued with regards to an arrest warrant for home owners.
Here is how the arrest warrant comes about. Unless you are still living at that surrendered property you may not have any idea that ticket has been issued. Therefore, you fail to pay the ticket and low and behold a warrant is issued for your arrest for failing to appear in court on a property that you thought you no longer owned. Even if the property has been foreclosed unless the mortgage company records the new owner you are still liable for that property.
If you think this scenario is too wacky and it never happens, I currently have a case with exactly this fact pattern. It can and does happen.
How can you protect yourself? If you have a house that you surrendered in bankruptcy keep in contact with the mortgage company to make sure the foreclosure goes through. Then ask them for a copy of the Trustee’s Deed showing the foreclosure is finalized. You can also check in your local Recorder of Deeds office to see if the Trustee’s Deed has been filed. If it has not, contact your local city inspector’s office and bring them a copy of your bankruptcy to show that you surrendered the property in bankruptcy. It does not work every time but sometimes the inspector will starting hounding the mortgage company and sending them the bill for maintenance.
If your house has been foreclosed already, again check the Recorder of Deeds office to see if the foreclosure has been recorded. Unless it is recorded the city considers you to be the legal owner, I cannot stress this point enough. Protect yourself and follow up. The consequences are too great to leave your future in the hands of the mortgage company.