Keeping rental income

[jcinsc76]

Hello everyone,

I had my 341 meeting last week and it went well. As I have stated before, I own 3 rental homes, all of which were my primary home at one time. I have filed CH 7 and have chosen to surrender all 3 homes. Because of this, I have not made a mortgage payment since September.

My attorney emailed me today and told me we received a letter from the trustee ~ all is good. No issues. I am now waiting for my discharge.

My question is this: is there ever a time that the trustee does not claim entitlement to the rental income? Two of the homes are currently empty (as of this month) however one is still paying rent. Since my filing, I now have $5300 that I have received in rental income (sitting in an account). My attorney told me the trustee would most likely want it, but she has not said or sent anything.

Is this normal?

Thanks for any help,
JC

[justbroke]

We can't tell you if this is normal, because Trustees behave differently. There is no telling what they will ask you. Is your case an asset case?

[jcinsc76]

Keeping rental income

We can't tell you if this is normal, because Trustees behave differently. There is no telling what they will ask you. Is your case an asset case?

It is a no asset case.

Thanks,
JC

[justbroke]

If the Trustee sees no assets -- which rental income is one -- then you may be okay. I would do nothing with the cash from the rental until the case closes. Did your attorney provide you any guidance on the subject? I mean, guidance such as "hold until close"?

[backtoschool]

Did the trustee know that one of the rental properties had a renter? I would assume that you had to declare that as income on your petition.

If you declared the money as income on the petition and accounted for it as expenses on the petition, the trustee probably doesn't know that there is an accumulation that has built up. But trustees often do an asset check and a check of bank account balances after the 341, so the trustee may still ask for it. YMMV on what the trustee will check on after the 341, it varies by trustee and by district.

If the trustee doesn't ask for it, and if you are a no asset case, then you may get to keep it after your case is discharged and closed.