Surrendering Property: The Consequences of Surrender Are … Take Your Pick

Many bankruptcy attorneys do not explain the meaning of “surrender” to their clients as the attorney files out these bankruptcy petitions. “Surrender Dorothy” means “give it back” to the munchkins…not to the witch. However, “surrender” in bankruptcy means give up your rights to the home and property to the bank…or the bankruptcy trustee is there is equity. And you can bet your bottom dollar if the property isn’t underwater the bankruptcy trustee will figure some way to squeeze the money out of the bank.

Additionally, many bankruptcy attorneys use the surrender tactic to keep from having to oppose a motion for relief from stay by the bank, doing as little work as possible for their fee. Beware. Make sure you clearly state your intention to keep the home.

A note for law makers: since bankruptcy petition paperwork is so complicated and not designed for a pro she in the first place. If an attorney makes a mistake on the filing – make the statute read that the drafter of the petition is held accountable for errors rather than the debtor – and enforce financial sanctions collectible by the court on behalf of the debtor and its creditors.


In re Elkouby, 561 B.R. 551 (Bankr. S.D. Fla. 2016)

A chapter 7 debtor filed a statement that he intended to surrender real property securing a loan. After the bankruptcy case was closed, the debtor continued actively opposing a foreclosure action. In response the mortgagee moved to reopen the case and asked the bankruptcy court to compel the debtor to surrender the property. The central issue was the meaning and consequences of “surrender.”

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