Expert: Terry Leeders - 4/11/2008

Question
Hello, thank you for your time.  My parents are about to file for Chapter 7.  They cannot afford their home with their current income and wish to surrender it.  The attorney we spoke with spoke so quickly it was hard to absorb all of the information. If the court is unable to sell or does not want their home, is the mortgage owed still eliminated?  
Thanks again.

Answer
Yes.
When a home is surrendered in bankruptcy, the trustee has the first option to sell it.  If they cannot, or do not want to, then the mortgage company will foreclose on the note.  The bankruptcy will discharge any balance remaining after foreclosure sale.