Can I keep my rentals?

[jefferino]

I am going to file CH7 soon for credit card debt but I have 2 rentals with tenants in them.

Is there a way for me to take advantage of this moratorium on foreclosures? I would like to keep the rentals as long as possible so that I can keep pocketing the rent. If the banks will not foreclose then why should I?

I am currently 3 months behind on credit cards and 3 months behind on mortgages for the rentals. I haven't spoken with anyone at GMAC yet about the foreclosures.

Should I pay just enough of the arrearage in order to hang on to the rentals? Please advise on best way to do this.

I already paid the money for the attorney but haven't paid for the court costs yet.
I'm sure she would understand.

[scorpion35]

i think that once u file the rent money from your tenants will go to the bank but i am not sure
u can't have the cake and eat it to

[keepmine]

Once you file, your property becomes property of the bk estate. Very likely, you'll need to turn the rent receipts over to your trustee.

[biotechsolution]

Once you file, your property becomes property of the bk estate. Very likely, you'll need to turn the rent receipts over to your trustee.

+1. You should also inform you tenants that you are filing. The trustee may also ask about your tenants rent since you've been behind, it would be considered income. Don't forget your tenants sercurity deposits.

[despritfreya]

Once you file, your property becomes property of the bk estate. Very likely, you'll need to turn the rent receipts over to your trustee.

It is not just very likely, it is a given. Any rents you collect from the day you file until the Trustee abandons the rentals, belongs to the Trustee NOT you. If you collect rents and do not turn over the money you will be sued by the Trustee for the recovery of Estate property and will most likely lose your discharge.

What amazes me is that it appears your attorney did not tell you this.

Des.

[backtoschool]

I agree with keepmine. Once you file for bankruptcy, the rent money goes to the trustee as part of your bk estate. Also, your tenants may not want to live in a property that has been turned back to the bank and should be notified of your filing.

Being three months behind on the mortgage on the rentals, not telling your tenants that you haven't paid the mortgage and are filing bk, and pocketing the rent money would allow your tenants to sue you for breach of lease contract which would be a separate trial than your bankruptcy trial and would produce a non-dischargable judgement, since pocketing their rent money and not paying the mortgage, and not turning over the money to the trustee would be considered bankruptcy fraud.

[scorpion35]

he stopped paying the mortgage,is filling for bk and wants to keep the rent money !!! damn

[tcreegan]

to take advantage of this moratorium on foreclosures?

It is only going to be a matter of weeks, not months

Probably won't help much...

Tom in Colo

[debee]

I found this thread that might have some useful info for you about collecting rent during bk ...

http://www.bkforum.com/showthread.php?47139-Collect-Rent-after-file-Chapter-7

[despritfreya]

I found this thread that might have some useful info for you about collecting rent during bk ...

http://www.bkforum.com/showthread.ph...file-Chapter-7

Part of this referenced thread discusses collecting rents after filing and leads one to believe such is ok. This is a warning:

ANY CHAPTER 7 DEBTOR WHO CONTINUES TO COLLECT RENTS AFTER FILING AND FAILS TO TURNOVER THOSE RENTS (WHICH ARE REVENUES GENERATED BY PROPERTY OF THE ESTATE) TO THE TRUSTEE WILL, WHEN THE TRUSTEE DISCOVERS THE IMPROPER CONDUCT, BE SUBJECT TO A TURNOVER COMPLAINT AND A POTENTIAL LOSS OF A DISCHARGE.

Des.

[debee]

I wonder if it matters where you live because where I am we're under no legal obligation to tell our tenants whether we're making the mortgage payments or not.

(No comment on moral obligations.)

[backtoschool]

I wonder if it matters where you live because where I am we're under no legal obligation to tell our tenants whether we're making the mortgage payments or not.

(No comment on moral obligations.)

Your tenants could sue you for breach of contract and damages if they were evicted by the bank before their lease was up and you had not given them notice that you were not paying the mortgage. That lawsuit debt would be non-dischargable debt.

[debee]

No lease in our case. They're month to month.

[backtoschool]

No lease in our case. They're month to month.

I don't see an issue then legally as long as the rent money is turned over to the trustee.

[debee]

We're not going to be open to receive any rent money once we file. We're giving our tenants their damage deposit money back and letting them know we're no longer collecting rent. They can save it and pay the trustee if they want or just wait to be evicted by the new owner once the whole thing is said and done.