When the bank starts the foreclosure process and you’ve given up hope of saving your home, you might be tempted to just get out and start over. However reasonable this might seem, leaving before the title is transferred out of your name could result in what’s known as a “zombie foreclosure,” a surprisingly common situation with potentially serious consequences. Here’s how it could affect your finances for years to come.

What Is a Zombie Foreclosure?

In some situations, the bank may file the paperwork to initiate foreclosure but never actually finish seizing the house. Perhaps they had an oversupply of foreclosed homes on their books, or the house was in such poor condition it wasn’t worth selling. Sometimes the paperwork is simply lost in the shuffle. When this happens, the property is still listed in your name, although you may be thousands of miles away.

What Are the Consequences?

Even if you’re not aware the house is still listed in your name, you’ll still be liable for property taxes, late fees, and penalties. If you were part of an HOA, you’ll still owe dues, and the local government might bill you for lawn maintenance, garbage disposal, and graffiti cleanup. Even worse, if the property becomes a nuisance, attracting squatters and crime, the city might fine you for the condition of the house.

If you’re facing foreclosure, a skilled bankruptcy attorney can help identify your options and avoid some unintended consequences. Based in Mobile, Padgett & Robertson, Attorneys at Law focuses on helping struggling borrowers throughout Southern Alabama find solutions to their financial issues and start their lives over again. Visit their website for more on their bankruptcy services, follow the law firm on Twitter for news and updates, or call (251) 342-0264 to request a consultation with an experienced bankruptcy attorney.

No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.

We are a debt relief agency. We help people file for Bankruptcy relief under the Bankruptcy Code.