I surrendered my house in bankruptcy but I still own it....what happened?

So you filed bankruptcy and surrendered your house.  You moved out and thought you had put the loss of your home behind you.  Then, months later you get a letter or call from your friendly neighborhood code enforcement officer.  Why is he contacting you?  You don't own the house anymore....right?  As an Indianapolis, Indiana bankruptcy attorney, I am frequently faced with this question.  The reality is that under Indiana law (and most other states as well), you continue to own the home until such time as it is sold at a Sheriff's Sale.  Since you still own it, you are still responsible for making sure the property is kept in good condition (and in compliance with city codes regarding lawn care, etc.).  If you fail to maintain the lawn, or keep the sidewalks in a clean and safe condition (or comply with any other city housing codes), you can be held personally responsible.  This could result in costly fines being levied against you after the bankruptcy is discharged.  You would be forced to pay them. 

The same is true for your homeowner's association dues.  Until the house sells at a Sheriff's Sale, you will continue to be responsible for the dues that accumulate after the bankruptcy.  Any dues you owed at the time of filing will be discharged.  However, any dues assessed after the date of filing and before the Sheriff's Sale will be your responsibility. 

Another area of concern is your responsibility to third parties who are injured on your property or by your property after you have filed bankruptcy and surrendered the home.  Since you are the owner of the property and entitled to "all incidents of ownership" until a Sheriff's Sale takes place, you could be held liable for third party injuries.  A homeless man decides to crash in your now vacant home and he falls down a flight of stairs.  He could opt to sue you for the injuries he sustains.  Whether he would prevail in that lawsuit is another story, but he could certainly pursue you. 

What if your empty house burns to the ground and in the process catches the neighbor's house on fire....are you liable for the damage?  You would most likely be responsible since you are still the owner of the property and therefore still responsible for the house. 

This is where your homeowner's insurance kicks in.....right?  Well that depends on whether you or the mortgage company have kept the home insured.  Most mortgage companies escrow insurance premiums these days, but if you are not paying your mortgage payments, the property might not be insured.  Even if it is insured, it may not cover injuries sustained by third parties.  The mortgage company may have taken out "forced place" insurance that will protect their interest in the property
only but not protect you against claims from third parties. 

The important lesson to learn here is that just because you surrendered your home in a bankruptcy does not mean you are no longer the owner of the property.  It is important to take steps to protect yourself until the Sheriff's Sale takes place. 

If you have questions/concerns regarding this or other matters, please contact The Law Office of Travis Van Winkle, LLC.  317-566-2080.