letting go of house?

[Maine]

I own a small rental property that has a first and second mortgage (seperate banks.) I want to let the house go in the ch 7, but I am wondering what happens with the 2 mortgages. There is no equity in the house, the 2 loans are equal to the valuation.

I know I can't do "cash for keys" or deed-in-lieu. Will they just forclose on it? I need to know what to tell my renter. (They will move, no problem, just looking for aprox timeline.)

[SMinGA]

Lenders will foreclose - which is not a financial matter if the debt has been discharged in bankruptcy. Its the legal process to take back ownership. Any financial obligation (if it sells for less than what you owe + fees, etc.) will be discharged.

[rebuilt]

I'm in a similar situation. But as of now am current. How long can I collct rent from tenants before they start getting an idea if things go bad? It may be my only source of income for a while. In New York.

[Confused33]

Going through the same thing. People in the Foreclosure section are hit and miss.

I decided to kick mine out but I sure do wish I'd stuck with my original plan of making them stay until October and paying me rent. I'd of made $4K. Dumb ass dummy I am!

[angles]

The tenants will receive a filing notice when you file for BK.

Foreclosure is a separate process then BK but can be delayed through the automatic stay. With all the foreclosures on the market it could take months if not more than a year to close on the property so during that time you could collect rent. If you are worried about your renters after foreclosure, don’t. They have rights so the banks cannot just kick them out without some notice or moving money.