Skip to Content

How will surrendering my home in a Chapter 7 Bankruptcy affect my defenses to a foreclosure lawsuit?

By Oppenheim Law on Deficiency Judgments, Foreclosure, Real Estate & Roy Oppenheim

Hi, this is Roy Oppenheim, real estate attorney and foreclosure defense attorney. I wanna talk a little bit today about an absolutely fascinating area of the law that deals with both bankruptcy law and foreclosure defense, and it’s an area that literally intersects. And until now, there’s been a conflict, not just in Florida, but elsewhere, in what it means to go bankrupt and to surrender your property in a Chapter 7.

There are some federal bankruptcy judges, and I would suggest misguided, that have said that when you surrender the property in bankruptcy, you’re actually surrendering it and you’re actually surrendering all your rights to the foreclosure and that even if the bank isn’t the right party before the court and doesn’t have standing, you’ve surrendered. You’ve given up all your rights.

Well, there are some more learned judges, particularly in the South Florida area, that have concluded, and these are federal bankruptcy judges, that surrender can’t conceivably mean that you’re giving up all your rights in the foreclosure and that you subsequently can’t defend your foreclosure if, in fact, the party that is trying to foreclose is not even the same party that has tried to participate in the bankruptcy.

And so there are gonna be numerous arguments that, even if you do go bankrupt in a Chapter 7 and even after you surrendered the property, you will still be able to make certain defenses. So for example, you’d be able to make the defense that the bank or the lender doesn’t have proper standing to bring the foreclosure in the first place. Just because you’ve surrendered the property does not mean that you’ve surrendered all your rights.

By the way, I’m holding this because these kinds of issues is why being a lawyer is so exciting. It is the intersection of different issues of the law in different areas that requires one to think and ponder and figure these things out. And if there’s anything that we at Oppenheim Law do the best is we figure these things out. And we’ll figure them for you, and if you’re in bankruptcy, if you’re having creditor issues, my suggestion is you contact a good bankruptcy firm, you contact our law firm, and we will figure this out for you.

But in the meantime, if you go bankrupt in the middle of a foreclosure, at least in South Florida, you will have the right to have your day in court and be able to defend that foreclosure as it relates to whether or not the party that’s in the foreclosure, the bank, the lender, has proper standing. There may be some other arguments that you can’t make that you may need to surrender, but those are the things that we’ll figure out for you. Roy Oppenheim, from the trenches. Have a great day.