Trustee ask for rental income?

[mmenz22779]

I am will be in the proces of forclosure and wanted to ask about rental income. My lawyer said to stop paying on the properites and use the rental income for other expenses. I know on the means test you have to put in rental income but mine is off set by the businses expenses so i have a net 0 rental income so that will not have an effect on my means test. It his this reason why i am filing for B/K anyway.

I want to use the rental income i do receive until april as a way to help pay my lawyers fees and try and save some for exemption (for after i file). I plan on filing in april or may.We also need to buy a car (maybe a down payment?).

My lawyer some times takes a few days to respond to me.

Will the trustee ask about that rental income or can i include that for my exemptions. I live in CA and have 31000 in exemptions. I have already reported it on my means test so i am not hiding it.

advice or clarification please?

[mmenz22779]

Can the trustee take my rental income?

[ready2puke]

31k??? you mean 21k. I live in Ca also. How do you get 10k more than me???

[mmenz22779]

sorry typo

[mmenz22779]

any one?

[StartingOver08]

Are you still paying the mortgage on the rental property? If not, what will happen is after approximatly 90 days a summons will be served on you (the initial notice). If you have a lender like the one I have on my rental property they will deliberatly serve the tenants about 1 week or so before you get served. You will know it right away because the tenant will call you INSTANTLY!

Once the tenant receives notice, it is difficult to impossible to get them to pay any sort of rent. So at that point you will not have to worry about what to do with your rent proceeds.

[mmenz22779]

No i will stop paying for the mortage,

I have taken the means test for chapter 7 and included it as income and it appears I still pass for chapter 7 or 13 as long as only include 3 months of rent as income.

if I collect three months income then the averge is 1200 if i divide by six.


I do not want to "Hide" any income and i wil report it on my means test anyway as i will still pass so their really is no reson not to from what i can see and on my taxes. I really need that money to pay for the lawyers and the HOA. It is only 5000 total income but by the time i pay the lawyer -2500-4000 i will have nothing left.

I dont want the trustee to say "hey you need to give the money that you took in rent back".

1) Can I tell him i used to help pay for the BK?

2) Can the bank go to the renter and demand it from them if they dont move out?

3) How do I handle my tenents? I was thinking of having them stay for 3 months paying me full rent ( I wont pay the mortage company but i will claim the rent as income on my means test. Then give them a 60 day notice to move, tell them they dont have to pay rent for those 60 days and i dont have to give them back thier deposit.

This works out to about 5 months, just in time for them to move out before forclouser sale hits.

does this sound like it would be ok?

[StartingOver08]

That is similar to what I did. I made sure to credit the tenant their security deposit the month before the summons was sent to the tenant. (Not knowing the lender/servicer would send the summons to the tenant before they served me). In the mortgages I signed with rental properties there is always a rider for assignment of rents. I had not yet received the notice for the rent assignment because I filed 9/30/08.

[tbporter@ichold]

I want to do the same thing for all 9 of our rentals. If you plan on surrendering the rental properties, can we just call the banks after discharge and do a receivership and assignment of rents? Will the bank ask the tenants for back rent?

[StartingOver08]

I don't know yet! My 341 is soon so I am not quite there yet. In our area it has been tough to get the banks to take possession of the property because they have so many. As to asking the tenant for back rent - who knows. My tenant moved out once they were served the FC notice (about 6 weeks after that). So the property is vacant. Last time I checked, the bank does an 'inspection' about 1 x every 3 wks. At least that is what they charge me for ....a drive by to see that the property is still there.

[mmenz22779]

starting over that is my plan i will have the property vacant for a few months after NOD or a a month before forclosure, this way the bank has no intrest in the tenent. My lawyer said the bank wont go after the tenent unless they stay thier after the foclosure.

So to be safe collect some rent, report it on your means test,find a good way to spend it and give your tenents 60-90 days to move and live thier rent free. It is a win win for everyone.

[StartingOver08]

Exactly.