5 Things to Consider When Walking Away From an Underwater House
Many people in Las Vegas and its neighboring municipalities are underwater on their mortgages, that is, they owe more money on them than their houses are worth. There are many options in these situations, such as short-selling the home, offering the deed in lieu of foreclosure, refinancing, seeking a loan modification or better yet, a principal write-down, and bankruptcy. Another option is walking away from the home. This is almost always the worst option of the bunch, and no one should do it without discussing their situation with an experienced Las Vegas bankruptcy lawyer. Here are some things to consider if you still wish to go through with it.
1. Walking away from the home does not mean you have abandoned the property. Legally, you are still the owner, and you can be held responsible for anything that occurs there. For example, if someone is injured on the premises, you might be liable for his or her injuries. Consequently, make sure your homeowner’s insurance payments are up to date.
2. Even filing bankruptcy does not extinguish your ownership to the property. If an accident occurs on the premises after your petition is filed, you might not be able to discharge it. Condominium fees that are due after the filing date, as well as any taxes that accrue, might also not be dischargeable.
3. As you move out of the house, go through all the steps you would if you were going on an extended vacation. For example, lock all windows and doors, turn off and unplug all appliances; cancel needless services like cable and newspapers; forward the mail to your new residence or a Post Office box; turn off the air conditioning but maintain a low level of heat to keep the pipes from freezing; remove toys from the yard; and hire someone to check on the home occasionally and work on your lawn to make sure it doesn’t look unkempt. You might be fined if you fail to maintain the property.
4. Do not remove any fixtures from the house, e.g. sinks, bathtubs, toilets, etc. If it’s permanent, it “belongs” to the house, not you.
5. Take an inventory of the house and its fixtures. Take digital photos if necessary. The idea is to ensure that there’s a before-and-after-type documentation in case damage occurs when you were not present.
Walking away from a home is usually the lowest on your list of options for dealing with an underwater mortgage. Again, do not do so without consulting with an experienced Las Vegas bankruptcy lawyer.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-803-9251 to set up your free consultation.