Foreclosure – on either a residence home or a vacation home – is always difficult. However, it is important during this emotional time to remember that the law limits a foreclosed homeowner’s ability to make changes or modifications to the property. This is because the effect of foreclosure is to transfer ownership to a bank or other institution. This passage of rights means that the former owner no longer has exclusive control over the property.
One such restriction on the former owner is their ability to make changes to the home. Specifically the homeowner is not able to remove certain fixtures that are permanently attached to the home. Examples of such fixtures include lights, ceiling fans, and garage door sensors, among others. The question for a court will be whether, when the fixture was installed, if the then-owner intended the fixture to be permanently attached to the house.
If fixtures are removed after a foreclosure is finalized, then the former owner goes into debt to the bank or now owner of the foreclosed property. This is because the now owner of the home will generally replace any removed fixtures at their own expense, and then bill the former owner for doing so. This new debt is above and beyond any others owed. These replacement costs can easily total several thousand dollars or more. This is because the new owners are not allowed to use the cheapest replacement service they can, but simply a replacement service.
Importantly, such debts are not subject to discharge if the former owner decides to file for bankruptcy. This is because courts interpret the removal of permanently attached fixtures as intentionally lowering the value of the property for the new owner. This is the case even if the former owner was the one who purchased the fixtures in the first place and still thinks of them as ‘theirs.’
If you are facing foreclosure or considering bankruptcy, or simply wish to speak with an attorney who is familiar with these issues, please contact our office at (205) 244-1920. Additionally, please review our website at www.birminghamlegalteam.com.
According to statistics recently released by the United States Federal Courts, 30 percent of individuals who filed for Chapter 13 bankruptcy had filed for bankruptcy within the past eight years. Some of the legal implications of a second filing for bankruptcy can be found here.
According to the same report, it took between 115 and 205 days from the date of filing for bankruptcy for the debtor’s proceeding to be completed. This time frame is important to keep in mind when filing for bankruptcy; while many of the forms are available online, it is generally advisable to seek professional legal counsel in navigating this complicated process.
The report also noted that creditors’ efforts to collect debts, even during the bankruptcy process, have been increasing. This is in spite of the fact that such actions – known as creditor misconduct – could expose credit agencies or other groups attempting to collect a debt to serious fines by the federal bankruptcy courts.
In Alabama, almost ten thousand individuals or businesses filed for bankruptcy in 2012. If you are considering filing for bankruptcy, or simply wish to discuss the bankruptcy process and potential options with an attorney, please contact Parkman and White, LLC at (855) 569-1678. Our attorneys are familiar with the Bankruptcy Code and can answer questions regarding your rights.