In bankruptcy, some words don’t have their ordinary meanings. “Surrender” is one of these words. Many people who file bankruptcy surrender real estate or their car. They think that once they tell the Court, the Trustee and the creditor that the item is being surrendered they’re done with it. They’re not.
When property is surrendered in bankruptcy, it doesn’t mean that the creditor automatically becomes the owner. All that it means is that creditors who have liens on the property can exercise their state law rights with respect to the property. In non-legalese, this means that they can foreclose on or repossess the property as your state’s laws allow. It DOES NOT mean that they become the owner UNTIL they complete the state law requirements for becoming the owner.
In the case of real estate, this means that they must file, notice, and complete a foreclosure auction. In the case of a car, this means that they must follow state law procedures to allow it to repossess and sell the car.