Question about renting from my brother

[banca rotta]

Hello, I have been lurking around here for some time now and I qualify for a chapter 7 according to the means test.

My question is I rent a converted garage apartment from my brother and give him cash every month. Will this present a problem? Do they need to see some rental agreement? Does anyone have any similar situations? I know I will be asked at the meeting if I am related to the landlord and I will be truthfull. I do not have a stake in this house nor did I ever have one.

Thank you!

[magyar123]

I don't think it really matters who your landlord is. Have him make up retroactive receipts of rent paid. The only issue that might come up is your cash payments and not checks.

[AmyJ]

i also rent a converted garage apt. i pay cash when able, but have yet to pay full amount,that's a question i need answered as well... my family sat down w/ calculator to show me i can't keep going on like this.. paying minimums & only getting in deeper. I know anyone else would have thrown me on the street.
I'm cash as well.

[gophermn]

Right, I doubt the trustee will want to know if the landlord is related, if they are registered with the state, if they use this rental as a homestead or rental - blah blah blah. Other words I would expect the trustee MIGHT ask the following:
Do you have signed lease? What are the terms?
What is you monthly payment? Do you have copies of rental payments?

Thats about all I think they will ask. I was a landlord with a rental and my trustee asked me nothing about income. Basically because it was listed on the petition.

[banca rotta]

Right, I doubt the trustee will want to know if the landlord is related, if they are registered with the state, if they use this rental as a homestead or rental - blah blah blah. Other words I would expect the trustee MIGHT ask the following:
Do you have signed lease? What are the terms?
What is you monthly payment? Do you have copies of rental payments?

Thats about all I think they will ask. I was a landlord with a rental and my trustee asked me nothing about income. Basically because it was listed on the petition.

The problem is I don't have any rental agreement and hopefully they will beleive that my rent is really what I am listing. It's a little below average for my region so I guess it will be ok.

Thank you all!

[gophermn]

If that is the case then perhaps you can get your brother to draft up a document saying how much you are paying for rent and to get the letter notarized.

The trustee might not care but I just don't want to see you at the 341 missing something simple like that.
If your brother has a special savings/checking business account that might help. I had my rental business listed as a LLC and had a LLC business checking so all rental (cash or check) were deposited.

Again, I would have something notorized from your landlord. Last thing you want is to have the trustee or US Trustee questioning your expenses and listing you as an asset case.
Good luck!!!

[banca rotta]

If that is the case then perhaps you can get your brother to draft up a document saying how much you are paying for rent and to get the letter notarized.

The trustee might not care but I just don't want to see you at the 341 missing something simple like that.
If your brother has a special savings/checking business account that might help. I had my rental business listed as a LLC and had a LLC business checking so all rental (cash or check) were deposited.

Again, I would have something notorized from your landlord. Last thing you want is to have the trustee or US Trustee questioning your expenses and listing you as an asset case.
Good luck!!!

They wouldn't list me as an asset case. Even worse they would demand proof that I am paying what I say I am paying on the schedules and go through the inquisition of claiming abuse.

I'll get the paperwork ready just in case.

Thanks again!

[sisterfunkhaus]

I am renting from my mother. I am paying by check every month and listing it as rent.
If you pay in cash, I would suggest back dated receipts or a notarized copy of a payment summary signed by your brother.

[AmyJ]

I've been paying in cash what little i can. my relatives wanted me out of debt & were sure i'd make it. i haven't. after a few lawyer consults the info conflicts, in part b/c so many ppl are filing now, esp in my state, & in part b/c there seems to be no one answer. I'm keeping track & don't want anyone involved in my mess. but i see possible options A) going w/ my notes based on what bro-in-law & I agreed on. b) having him draw up formal lease which drags him into this. He's not declaring what i paid and it has been pitifully little the last 13 mos.. We all keep track but on paper, just not a signed lease, but i had that the 1st 6 mos.

I just got my salary cut again & can't live on it taking into consderation "going" rents in area, utilities, food, car ins., health ins, fone etc. I need family help until i complete this process & move. I've tutored on the side 4 cash & that is how i paid ppl. close to me.

I've had the free consults & have a few more but i want to move ahead even if on my own. I see that too much has been "all in the family". Has anyone been in this situation? Part of me says to drag bil & family into this, w/ IU at least, but that's the last thing i want to do to ppl who help me, esp. b/c they get a notice in the mail,,,all of them. thank you.

[keepmine]

First of all Amy-have you stopped paying all debts you wish to discharge? If so and you still can't pay normal living expenses then, you have a bigger problem than bk. You have to be able to support yourself post bk. If, you have stopped paying cc's etc. and still are struggling then, put this bk on the backburner and put all of your eforts into finding a new job. The bk option will still be there once your life has stabilized.
If you're still paying unsecured debt then, stop and use those payments for living expenses and see if you can make it post bk.

[AmyJ]

I stopped paying debts to be discharged, have stuck to budget & i can pay rent & rest got thru 1st month feeling guilty but relieved!
i'm hesitant to get family involved in writing, list any names regarding lease we're ignoring... am unsure how to handle.
so i can do it w/out the huge monthly cc payments. the job search is not as active as it was, am trying to start bk first.

[soleprop]

i can't imagine there's any legal requirement to have a lease or binding agreement to pay for your living arrangements, particularly when you're living with a family member. i would suggest averaging what you've paid for your living expenses over the year, and then putting that as your monthly; it sounds like you haven't paid a consistent amount but whatever you could afford. if the average comes out to even a couple hundred a month, it helps you to prove that in general, this is an expense you have.

[JRScott]

The trustee here asked no questions about my rental agreement, and I basically rent from my parents. Might be handy to have receipts ready in case, but I was not asked for them.