“I’ve Changed My Mind – I Want to Surrender My House”: What Effect Does Post-Confirmation Surrender Have on the Debtor’s Discharge?
The debtor’s attorney needs to take the time to discuss the probability of maintaining house and other secure debt payments over the course of the Chapter 13 – 3 or 5 years. A vehicle that may not survive the life of the bankruptcy but with significant debt may need to be surrendered at the outset.
Changing one’s mind about surrendering a house within a confirmed Chapter 13 could be a huge issue unless the debtor was eligible for a Chapter 7 at the inception of the Chapter 13. If they were eligible, but chose a 13 for other reasons, then the best practice would be to convert to a Chapter 7 and surrender the house in that bankruptcy.