Behm Law Group, Bankruptcy Attorneys

Foreclosure can make any house feel haunted in the Mankato, MN area, but there’s a certain type of foreclosure that’s especially chilling: zombie foreclosure. Although this type of foreclosure doesn’t include actual moaning zombies crawling down the street, it still feels scary to homeowners.

Just as in regular foreclosure, zombie foreclosure requires a certain timeline, especially in relation to bankruptcy. If you declare bankruptcy, your mortgage debt may be discharged to you personally (i.e. you are no longer personally responsible for it) but transfer of the property title and deed is done solely by the bank that controls your mortgage. Sometimes a bank will decide not to finish the foreclosure on the property and leave the title in your name, even though you believe you surrendered your house when you filed for bankruptcy. Thus a zombie foreclosure can wrack up numerous debts and tax expenses for homeowners if they are not careful, which can result in both financial troubles and, ultimately worsen your financial prospects with bankruptcy.

Fortunately, the professionals at Behm Law Group, Ltd. can give you perspective on bankruptcy and zombie foreclosures. Follow these simple rules and you’ll easily survive zombie foreclosure and negotiate bankruptcy no matter how terrifying it may seem:

• Rule #1: Know your enemy – Zombie foreclosure occurs after a homeowner has moved out of a foreclosed property too quickly. If the bank does not claim the property, the property deed remains in the homeowner’s name. This can also be known as a “zombie title” or a “zombie property.”
• Rule #2: Know your area – There are a few states with especially heightened numbers of zombie titles. These states include Florida, Illinois, New York, and New Jersey because they have especially lengthy foreclosure processes, meaning homes can sit vacant for long periods of time. For the record, states with lower numbers include California, Arizona, Nevada, and Washington.
• Rule #3: Know the risks – Homeowners remain responsible for zombie titles if they are not transferred to the bank. As a result, homeowners become responsible for a great deal of debt and expense, which may ultimately lead to a bankruptcy filing in addition to foreclosure. Therefore, before moving out of the house and filing bankruptcy, it’s important for homeowners to know the property title has been transferred.
• Rule #4: Know the solutions – Before moving out of a foreclosed home, be sure to check with the county recorder’s office to ensure the title has been transferred. If it hasn’t, your foreclosure may begin showing signs of the undead!

By following these rules, you’ll survive zombie foreclosure and avoid deepening your bankruptcy situation in the Mankato, MN area. If you need backup help, the professionals at Behm Law Group, Ltd. can help with all your bankruptcy needs. Give us a call today.