Would it make sense for this house to be abandoned?

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A.P.M.

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I have a really hard time understanding legalese, so my wikipedia searches on foreclosure and house re-possession and things are confusing me. The situation:

A character loses his family in a car crash at the age of 17. Parents die. He wakes up after a week in a coma. He owes the hospital big $$$ (yes, this is America). He's in huge debt, and bounces, using fake names and living on the down low for a year.

What happens to his home? I need it to be abandoned for the sake of the story, with a lot of the items still inside, after a year. Is it reasonable to think that the bank wouldn't re-possess it and auction it off? Or that the hospital wouldn't claim it as payment and do the same?
 

neandermagnon

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My day job's a mortgage underwriter and I'm doing a course for being a financial advisor (although I'm not half way through it yet), so I'm not an expert but I know a bit about property law. Warning: UK, not USA. But the main principles will be similar enough. Get someone from the USA to check all the details.

Who owns the house? If his parents owned the house mortgage free, and left it to him in their will, it's his. No-one can repossess it. If they didn't leave a will, he'd inherit it anyway as he's their surviving next of kin (check intestate law in the appropriate state though - these things tend to vary by jurisdiction).

The bank would repossess a home only if there is a mortgage on it that's not being paid. There is no other reason why a bank would have any claim on the house. (In the USA I hear the term "home loan" a lot - not sure if this is technically a mortgage or some other kind of loan, but either way, the is no loan on the house = no repossession.)

For example, if he inherited the house with a mortgage but his parents had no life insurance (normally life insurance pays out enough to pay off the mortgage so the kids would inherit it mortgage free), then he'd inherit the mortgage as well. In theory this could lead to the house getting repossessed if he didn't make payments, however usually when someone inherits a property with a mortgage on it, the probate solicitors will sell the house, pay the bank what's owed on the mortgage, and the surviving relatives inherit what's left (per the will, or per the law for how to share out someone's estate where there's no will). So I wouldn't find it plausible that he'd inherit a house which is then repossessed by the bank, UNLESS he remortgaged it himself after inheriting it and then failed to make the mortgage payments. This wouldn't happen within a 1 year timescale though. Probate itself takes more than a year (solicitors are bloody slow).

Solicitor = UK lawyer that deals with boring stuff like property, wills etc. The other kind of lawyer is a barrister, who does more flashy stuff like criminal law.

If you want him to inherit the house and for it to be abandoned for a year after he inherits it, you'd need for it to be inherited mortgage free, either because his parents paid off all the mortgage before dying (or were rich enough to purchase it outright) or because they had a life insurance policy that paid the mortgage. However IMO you'd need an in story reason for why he didn't either live in the house, rent it out, remortgage it or sell it and instead chose to be in debt (he needs a financial advisor lol). He could've remortgaged it to pay the hospital bills then rented it out so the rental income covered the mortgage repayments and gave him a bit extra as well.

On the other hand, if you want him to be in big debt/financial trouble for a year before he gets his hands on the house then the most obvious explanation to me would be that the solicitors took their time sorting out all the probate - a year is actually quite quick for probate solicitors, so you can drag it out longer than that if you want. So he couldn't do anything about the hospital debt in all that time. Useless solicitors = he eventually gets the house he's inherited and it's in a crap state because no-one looked after it. Sounds like he didn't have enough money to pay for someone to keep it nice. Note: obviously it may be different in the USA, if you have super fast lawyers that deal with this stuff then I'd be pleasantly surprised.

Also note: in the UK you can rent out an inherited property before you technically own it. I know because I've assessed mortgage applications like this - property is still in the deceased person's name but it's already being rented out by the person who inherited it. The situation isn't even that rare, to be honest. I don't know how this would pan out in USA law though - it's probably different in different states so you'd have to find out for the specific state your story's set in. It's something to consider though, because if he can "own" it and live in it or rent it out before the solicitors officially transfer ownership of the house to him, then you have to consider how that fits in with him being in financial dire straits for a year.
 
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neandermagnon

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Having said all that, if he lives in an area where property values are low and hospital bills are high, then the hospital bill might be more than what the house is worth. Apologies for my UK centric thinking. Property prices in most parts of the UK are very high - I've seen 3-4 bedroom terraced houses in London on sale for over a million quid. Even outside of London you're looking at around £200,000 - £400,000 for a normal sized family home in many areas of England.
 
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Chris P

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If the family still owed money, the bank would foreclose and take it back.

If the house was paid for, it would probably depend on if the parents had wills. [Speaking out of nothing but my conjecture, here] If they willed the house to your MC, it sounds like it would we held in a trust of some sort until he was 18. If there was no will, I suspect it would go to probate court, where from what I've heard it could be tied up for years, especially if a greedy uncle or someone else tried to lay claim to it.

But as I said, all this is conjecture and if you get better advice (such as neandermagnon's), listen to it.
 

frimble3

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If the story is set in the US, the hospital bills will be huge. If you have the parents actually die in the crash, might not be too bad. If they linger in Intensive Care for a week or so, the bills will destroy his life. All that fancy life-saving equipment costs a fortune, and US hospitals charge for every aspirin.
 

neandermagnon

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Sorry I missed the bit about him being 17. Wouldn't he himself be in the care of the local authorities until he was 18? I'm guessing he ran away? If that's the case it would make sense that he's not doing anything like remortgaging the property (you can't get a mortgage at 17 in the UK) or renting it out, if he's got no advice. Though would a minor still be expected to pay hospital bills in the USA? What about the authorities that are supposed to be looking after him? If he's in the care of the authorities, wouldn't they pay his bills? Presumably he can't run away until after he's left the hosptial.

If he's inherited the property mortgage free then takes possession of it when he's 18, that makes a bit more sense from a property law point of view, but not from a child protection point of view. But IMO probate lawyers sorting it all out within a year is a bit ambitious. You'd need to check the local laws and situation regarding stuff like that.
 

benbenberi

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Another wrinkle for the house situation: property taxes. Even if the house is mortgage-free, there are probably taxes owed on it, possibly substantial taxes depending on the local assessments & mill rates. If those aren't being paid, the local govt has a claim, & can eventually have the property seized & sold to pay it. (Though this typically takes more than 1 year.)

Is anyone maintaining the house? If not, local authorities may cite it as blighted. And again, in time this can lead to a property being condemned, seized, & demolished or sold. Though not likely to get to that point in 1 year, they may have started down that path.
 

lonestarlibrarian

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The first thing I'd do is check to see if medical bills can be inherited in where your story takes place.

Then I'd check and see if the medical bills can be inherited by a minor.

Usually, debts go to the estate, rather than to an individual. If the estate isn't large enough to handle it--- then the debt goes unpaid.

But I do want to say that a 17yo wouldn't be responsible for his own medical bills--- because he's a minor, and isn't legally able to enter into a contract.

In Texas, I want to say that your declared homestead is exempt from confiscation for debt payment, unless that debt payment is directly related to (a) not paying your mortgage, (b) not paying your property taxes, and (c) not honoring a written contract with someone who does work on that house.

Likewise, in Texas, I want to say personal property up to the sum of $x is exempt from being confiscated to pay off a judgment. And I don't know if it's an "and" on top of that $x, but you can't have your only vehicle repossessed, you can't have your retirement plan confiscated, etc.

And in Texas, you can't even get your wages garnished to pay off debt, unless it's (a) unpaid child support, (b) spousal maintenance, (c) federal income tax, or (d) federal student loans.
 

neandermagnon

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If the story is set in the US, the hospital bills will be huge. If you have the parents actually die in the crash, might not be too bad. If they linger in Intensive Care for a week or so, the bills will destroy his life. All that fancy life-saving equipment costs a fortune, and US hospitals charge for every aspirin.

That's horrific.

In the UK the scenario where someone inherits a property mortgage free, they're pretty much sorted. They can live in it and never have to worry about rent or mortgage payments, or rent it out for extra income. Or sell it for a tidy sum. There'd still be council tax to pay if you live in it or abandon it but if you rent it out, the tenants are expected to pay council tax. Council tax is paid by the person who lives there for the cost of services provided by the council (e.g. rubbish collection). The only reason it's due on empty properties is to prevent homelessness, i.e. discourage people from keeping them empty when they could be renting them out.

Even if this isn't the case here if the hospital bills are greater than the value of the home, UK readers might need to have that spelled out to them.
 

InkFinger

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The most likely answer if he has siblings is that the house is the courts and no one is allowed to take it. Messed up inheritance will cause endless trouble and a year is nothing to the court.
 

Siri Kirpal

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At age 17 and orphaned, he could become an emancipated minor. Which means he could inherit in his own right and sell the house. In Oregon, it could be foreclosed on, but not confiscated for other debt. Except property taxes and that takes years.

But if you need it abandoned...he could just …. leave. No rules saying he can't. But you'll need to explain why. Did that injury addle his brain, for instance? Is the house in such bad shape it can't be sold or rented? All things to consider.

Blessings,

Siri Kirpal
 

Roxxsmom

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The most likely answer if he has siblings is that the house is the courts and no one is allowed to take it. Messed up inheritance will cause endless trouble and a year is nothing to the court.

Sometimes houses are abandoned for years, even decades, if a will is being contested. There is one such in my mom's neighborhood--a house that is quietly decaying because the owner's surviving kids can't agree on what to do with the property, and none of them can afford to buy the others out (the land itself is probably worth around two million dollars). The house is likely a tear down by now (even really good houses are tear downs in my mom's neighborhood, where the land is worth a lot more than the houses on it, so people who buy properties seem to want to build "McMansions" on normal-sized surburban. These new homes tend to look like mausoleums and take up nearly every inch of their properties with no yards to speak of).

Even normal probate court, when there is no will or living trust, can take quite a while to clear up, so a year doesn't seem outside the realm of possibility for a home to stand empty after someone dies. And it's possible for things to be tied up legally if a minor child has inherited a home but there is money owed by the deceased, and there may be adult next of kin involved who are distant relatives but conflicted over how to handle the situation. In the US, a minor who has no legal guardian, and no logical next of kin who steps forward, after their parents die would become a ward of the state, I believe, though the process likely varies by state.

One thing to be clear on, you do not inherit your parents' debt when they die, unless you co-signed on their loan with them. But their property can be used to pay off the debt they owe, and inheritance would be calculated from what is left

Another possibility is that the house is for sale, but it's not selling because the local market is anemic, or too much money is being asked, or something like that, so it could be effectively sitting empty, aside from the occasional showing by a realtor (if anyone is interested in purchasing the property at all).
 
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A.P.M.

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Thanks all. I will add more information here to help people, and to explain where my plan is going after your comments:

He was also in the car crash. His parents and brother were killed, he was in a coma for a week, then had to go through rehabilitation due to extensive injuries. The medical bills for him personally were huge (this is a private hospital, owned by the main evil capitalist antagonist of the book). His parents house was worth around 100k, the mortgage was not paid off. I am not opposed to aging him up to 18 to make this even more overwhelming for him.

My current plan is to have him have decided to run/do desperate things for money (sell drugs) once rehabilitation was over, the bills were due, and he started getting foreclosure notices (which apparently start after 4 months of no mortgage payments). Some of the damage he suffered was cognitive, so he's not perfect at making non-impulsive decisions. The book takes place a year after the accident, where he decides to go back to his old house after some events happen. It will have been 8 months after foreclosure notices started appearing. Will the bank have taken the house and sold it off by then? It sounds like time is the one factor that may make this realistic--would it be possible for the bank not to have moved forward on auctions after a year?

Also some of the comments I'm getting suggest this book would only work in America. It is a sci fi set in the near future of the US, but that aspect wasn't supposed to be the horrifying dystopian part...
 

MaeZe

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Sorry, only read half of the posts. In the US, my expertise is professional experience with minors and medical decisions, emancipation, the foster care system and all that, and personal experience with renters, probate and liens:

He cannot be evicted from the house initially whether he's in the hospital or not, he essentially lives there. Eviction takes a specific procedure and needs at least a month or longer. A judge can stop or delay the procedure if someone takes a foreclosure action.

In the hospital he will be assigned a medical guardian because medical decisions need to be made. He will also be assigned a financial guardian. Often these are volunteer positions the hospital calls on to be assigned. Whether or not he is placed in the foster care system will depend on how close he is to turning 18, (assuming he has no other relatives willing to take him in, so he needs to not have any close relatives). If he is close to turning 18 and he (or the guardian) petitions for emancipation, the court will grant it given he will age out of the foster care system at 18 anyway. If he just turned 17 he will likely be placed with a foster family.

As has been mentioned, if the house has no mortgage, there is no bank to repossess it. The hospital and the IRS may put a lean on the house for unpaid debt. Then they'd have to go to court to force a sale to collect the debt. If no one buys the house, there is no foreclosure procedure. This is different from the bank foreclosing and repossessing the house. Owners of leans on the house don't foreclose. Rather they can force a sale. No one takes the house until it is sold.

This might be all muddled with probate which deals with debts against the parents' assets, i.e. the house. Not sure how that goes with a surviving minor. That's complicated and again will depend on if the kid is emancipated by the courts. The probate court may require the house be sold to pay the estate debts and the remainder of the proceeds be given to the kid.

No one technically forecloses on the house during all this and I'd bet (though I don't know with certainty) that even if there is a mortgage not being paid during all this, that probate would muck with the foreclosure procedure as well. I would think the unpaid mortgage debt would become part of the probate procedure like any other liens against the estate assets.

Now I shall go read the rest of the thread. :D

Hopefully none of this contradicts the good information in Roxxsmom's post. :D
 
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AW Admin

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With the various bank mergers and closures in the last decade of the previous century and the first decade of this one, lots of houses whose mortgages were defaulted or whose paper banks bought were lost. So even houses that were paid off, because the paper work had been transferred so many times, got lost. I've read about people who had title to their homes having to go to court to prove they owned the place because the paper had been sold.

Banks and mortgage companies lose track of houses and didn't know who owned them. I once wanted to buy a house that I could track only so far as the loan was defaulted, the bank took over the house and then sold the papers to another large entity who did the same thing. I tracked it through several firms in the course of about six months, before I lost the trail. No one knew who owned the house, and taxes weren't paid, and just for the heck of it, I checked, and the tax office has apparently declared it will be auctioned.

It's been unlived in for about twenty years at this point. Even in SoCal, that's too long. Someone will buy it for the lot and raze the building.
 

jclarkdawe

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This can become an extremely complex situation but we can very simply get rid of a lot of your problems.

1. Parents, when they took out their mortgage, took the option to have life insurance cover the loan in the event of their death. They die in the car accident and the insurance company pays off the mortgage in a pretty much automatic process. Not a very unusual approach by many people and can be dealt with in less than a paragraph in your story.

2. In most states, kid is a minor and state would assume responsibility for the kid immediately after the accident. Parent's health insurance would remain in effect for a certain period and then, when that expired, the state's health insurance for children in its care would kick in. Good possibility the kid never sees a bill from the hospital. Unless your story is about the horrors of the US health care industry, write out this complication in another paragraph.

3. The state would likely ask the probate court to appoint an executor or administrator of the parent's estate. Once the kid disappears, the duty of the executor or administrator would be to maintain the estate, which would include keeping the house up and paying the property taxes, assuming there are any assets in the estate. This approach would assure that the property in the house remains rather than being stolen.

4. Guardianship of a missing 17 year old would go into legal limbo while the kid is missing.

In other words, most of your problems can (and would) be dealt with quietly in the background without the kid.

Jim Clark-Dawe
 

A.P.M.

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I do want him to be in debt and have a lot of problems to deal with, though. It sounds like he needs to be 18.
 

lonestarlibrarian

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How sympathetic do you want people to be to his plight? ie, are you trying to make him a victim of the world, or are you open to letting him get swamped under the burden of a series of poor decisions, whether those poor decisions are made from inexperience and naivetie (ie, going to a payday loan place to buy a fancy car he can't afford to maintain and insure), or whether those poor decisions are made from poor impulse control and selfishness (ie, he has three baby-mama's), or whether those poor decisions seemed good at the time, but were bad in the long run (ie, he dropped out of school to pull six figures in the oilfield, but now all the pumping/drilling is shut down and he has no backup plan, but still has all the tastes of a six-figure lifestyle).
 

neandermagnon

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I wanted to correct this from my post yesterday - coincidentally, there was a comms about this at work today. In UK law also you can't inherit a debt. Usually the probate solicitors would sell the house, pay the bank what's owed and what's left would be inherited. Just wanted to correct that.
 

neandermagnon

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As you are writing near future dystopia, maybe you could consider having some changes in law that make his situation fit how you want it to be. For example, under current law, he can't inherit a debt. But suppose in your future dystopia, that law's been changed, so bailiffs, banks etc go after people who have inherited debt. He inherits the house and the mortgage, except he's got no way to pay the mortgage so after the missed payments, they're talking about repossession. Though IMO the bank/financial institution that lent the parents the mortgage without adequate life insurance being in place, given the possibility of children inheriting the debt, are extremely irresponsible (and the FCA* would have their guts for garters - but maybe bodies like the FCA don't exist any more, or they're corrupted too), but probably most readers wouldn't think of that, and it's a dystopia, it would just make it all the more dystopian.

The current healthcare system in the USA is already dystopian, you can leave that as it is, or make it worse if you want. Maybe he inherits his parents medical bills too.

*financial conduct authority - I don't know what the USA equivalent's called but I know it has one. Oversees financial companies/organisations and makes sure they're treating customers fairly and not doing things that might cause the economy to collapse like it did in 2008.

He's a minor but maybe they changed the law so people legally come of age at 16. So maybe the state has no obligation to help him out at all. And he's liable for all his medical bills.

I've got a similar situation in one of my WIPs which is set in the near future, but it's not a dystopia. There are laws that I need to exist for story purposes, that deal with things that aren't really things yet in the present day. So I just invented the laws. In UK law, they're referred to by "the xxxxx act of (date)" or similar, so I just give the law an official sounding name and stick a future date in there if the law ever needs to be referred to in an official context.

Also if you have some changes in law, corrupt financial companies and corrupt, absent or toothless organisations that are supposed to be overseeing them, you can pretty much decide for yourself when the bank's going to try to repossess the house. Make it fit your story. Keep on researching how the laws are now, so you know when to throw in something about how the law was changed, or scrapped, or isn't being enforced properly.
 
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Siri Kirpal

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Just want to point out that if you're going to have him selling drugs, as your second post indicates, then you may want to look at the high probability that he became a drug addict in the hospital. That a very common situation. Morphine and/or Percocet.

Blessings,

Siri Kirpal
 

A.P.M.

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Thanks all. I already have him addicted to nicotine (in this near future, combustible, easily-rolled cigarettes are illegal and have been replaced by legalized fancy E-cigarettes), but the drug he is selling is a very dangerous new drug that he has not tried. He sells it because it's dangerous and desperate rich people pay a lot for it. This guy was never rich and does not expect a rich lifestyle, but he still makes some bad decisions--like a stupid habit of paying more than he should for the illegal cigarettes he likes instead of saving money, not having a steady job, etc.

I like the idea of changing laws around a bit to fit the world and put him in the bad situation he finds himself in, which is a combination of tragedy, bad luck, unfettered capitalism, and his own bad decisions. All of this is world-building and backstory, but I want to have a good understanding of it so as I write the story, the world feels complete.
 

MaeZe

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I wanted to correct this from my post yesterday - coincidentally, there was a comms about this at work today. In UK law also you can't inherit a debt. Usually the probate solicitors would sell the house, pay the bank what's owed and what's left would be inherited. Just wanted to correct that.

If he's 18, it's his debt. If he's 17, the debt goes against the estate and then would come out of his inheritance if there was anything left after the estate was settled.
 
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