Collect Rent after file Chapter 7?

[brandon94]

I have a rental property in Florida that I have stopped paying the mortgage several months ago and am still collecting rent from my renter. I am planning to file at the end of next week. I am including the rental income in my means test which puts me slightly over median income but I have a high child support payment that lets me pass the means test anyway.

My questions is should I still collect the rent for November 1 which is before I file and is there any way to keep collecting after i file. I thought I couldn't collect after I filed but I had one lawyer I consulted with who said to collect and save the money for the HOA fees which I will be responsible for after filing.

The condo is in the foreclosure process but there has not been a summary judgement or auction date set yet and banks are taking a long time to forclose in FL these days.

Thanks.

[shabam]

Are you handing the property back to the lender?

[ForumReader]

I have a rental property in Florida that I have stopped paying the mortgage several months ago and am still collecting rent from my renter. I am planning to file at the end of next week. I am including the rental income in my means test which puts me slightly over median income but I have a high child support payment that lets me pass the means test anyway.

My questions is should I still collect the rent for November 1 which is before I file and is there any way to keep collecting after i file. I thought I couldn't collect after I filed but I had one lawyer I consulted with who said to collect and save the money for the HOA fees which I will be responsible for after filing.

The condo is in the foreclosure process but there has not been a summary judgement or auction date set yet and banks are taking a long time to forclose in FL these days.

Thanks.

Is your renter aware of your foreclosure process on your property he/she is renting from you? I don't know if you should collect the Nov rent and thereafter, but consult with an attorney.

[brandon94]

Yes I am.

[AngelinaCatHub]

There is nothing wrong with getting the rent. I would not tell your renter anything until you are notified of any action. You still own the place until your name is off the Deed. Have you filed? You are only responsible for HOA after you file as it is an obligation after your bk. Anything before, forget it. Make sure your check states the month and year you wish it credited to so they cannot just say it was owed (before filing) as it is not. 'Hub

[ForumReader]

There is nothing wrong with getting the rent. I would not tell your renter anything until you are notified of any action. You still own the place until your name is off the Deed. Have you filed? You are only responsible for HOA after you file as it is an obligation after your bk. Anything before, forget it. Make sure your check states the month and year you wish it credited to so they cannot just say it was owed (before filing) as it is not. 'Hub

I do not mean to hijack the thread, but I am curious (I am a renter), is it ethical to collect rent from a tenant when the owner has stopped paying mortgage payments on the property (being in a foreclosure process)?

[OhioFiler]

I do not mean to hijack the thread, but I am curious (I am a renter), is it ethical to collect rent from a tenant when the owner has stopped paying mortgage payments on the property (being in a foreclosure process)?

Of course it's ethical. The tenant isn't filing BK. The tenant didn't insist on a clause in the lease that allows for the non-payment of rent in the event the lessor fails to make mortgage payments.

There is no relationship between a renter's obligation to pay rent and the landlord's finances.

[AngelinaCatHub]

I do not mean to hijack the thread, but I am curious (I am a renter), is it ethical to collect rent from a tenant when the owner has stopped paying mortgage payments on the property (being in a foreclosure process)?

OH is exactly correct. Your renter is purchasing goods or services from you (the apartment). You in good faith are still compelled by taking his monies, to make the normal repairs for the benefit of the renter. The renter has business with you, the owner. The mortgage is a separate issue. the day you signed to purchase that house, you owned it 100%. The mortgage is ancillary only as a lien against the property. They must sue you for breach of your mortgage then the Court awards them the "damage" in the form of the secured (liened) property. 'Hub

[ForumReader]

OH is exactly correct. Your renter is purchasing goods or services from you (the apartment). You in good faith are still compelled by taking his monies, to make the normal repairs for the benefit of the renter. The renter has business with you, the owner. The mortgage is a separate issue. the day you signed to purchase that house, you owned it 100%. The mortgage is ancillary only as a lien against the property. They must sue you for breach of your mortgage then the Court awards them the "damage" in the form of the secured (liened) property. 'Hub

Ok thanks, I was just wondering. Alright, back to the thread for any more comments/feedback to the OP.

[AngelinaCatHub]

Ok thanks, I was just wondering. Alright, back to the thread for any more comments/feedback to the OP.

You have not hijacked a thread when you ask a question that both answers your question (just as important as the Op's) and it also compliments the vein of the thread.

At times, I have thrown some joking words off subject, just to lighten up the Op's mood (as intended anyway). As long as the thread doesn't just go to pieces, I see nothing wrong with it. 'Hub

[brandon94]

Hub,

I am going to file late next week after collecting the November rent. Will the trustee have a problem with me collecting rent after I file. Won't they try to get the money if they catch wind of it? I also collected a security deposit from the renter in which I don't have the money anymore. Some people recommend putting the renter in the petition as a creditor for the deposit. If I do that however I assure myself of not collecting any more rent from that person and alert them of the bankruptcy and foreclosure.

These days in Florida properties are sitting there for along time without being foreclosed and after that with the new Obama tenant law the renter gets 90 days to vacate. Because of that I am very confident my renter would be able to stay there for at least 6 more months.

[AngelinaCatHub]

Yes you have a point. Put the rental down as income. If it is not exempted, it become part of the estate. The deposit is also part of the estate. I cannot see how you can file against the renters. In reality the deposit BELONGS to the renter. I would do this to simplify the situation. Forgive two months of rent to the renters and tell them that is payment of their deposit. They may not understand but that may set off questions and they just may never pay rent again. Remember you cannot sue anyone while in your stay. You won't have grounds to sue them after the house is foreclosed. Perhaps they are good enough renters that your "benevolence" and for Christmas makes you feel generous. Well that's a little white lie, but I'm sure you will figure a way.

Here's another, you might consider a rent reduction and tell the renters their deposit will be the reduction in rent. If they get their deposit back, you would not need to include it as an asset in your forms.

If you are represented, you should ask your lawyer on this one. It is touchy. 'Hub

[awayalways]

Hub said it better than I could have. But just to tell the OP, I am in the same position having a Florida rental before, during and after my BK7. I have had no problems and this has been going on for several years now.

[brandon94]

So did you collect rent after you filed even though you were giving the property up? Did the trustee ask anything about that in the 341?

Thanks

[awayalways]

So did you collect rent after you filed even though you were giving the property up? Did the trustee ask anything about that in the 341?

Thanks

Yes, I am still collecting rent and the debt is reporting IIB. I was discharged 04/08. No problem at the 341. Even with the rental income, I passed the means test.