Post 341/Discharge/Closing Advice

[StrawberrySu]

New wrinkle. One property has an assignment of rents clause. No payment has been made for almost a year, no foreclosure notification yet, no enforcement of AOR clause. Once property is discharged in BK, can the bank enforce the AOR clause? So if I rent it after BK, can the bank require the rents to be paid to them, if I no longer am liable for the debt?

[jst4f]

I would rent it and pay the expenses but not the mortgage if you plan on letting the bank foreclose. What we did when the bank asked for the rent, most mortgages have the rent clause, is to tell them to go collect it oh and by the way we are canceling the insurance , HOA, water etc. They backed down in each case. Foreclosure has not happened yet.

Do keep a reasonable level of liability issurance to cover you if the banks start collecting the rent but not property protection insurance. You are liable as long as your name is on the title.

You could try to get a lien modification to the mortgage to a level that is less than the PITI. Even if you can't get a lien modification, you delay the foreclosure and you should be able to collect the rent to help with other expenses. This can only happen post discharge/closing.

The big banks you are dealing with will behave about the same, in their own best interest. Period.