Help, my Landlord wants to file BK! =(

[Mark80]

My wife and I found the perfect home, in every sense and have signed a contract and plan on moving in next monday. However the landlord obviously knew we filed bankruptcy and started to ask my wife all questions about it today. They are in a very bad financial situation like many of us and have 3 rental homes they rent out. However they owe big time on each house and have now moved down to florida where they are barely making it.

Should we move into this house, we signed a contract and gave them our deposit but now I am very worried they are going to file and drop all their houses?

Can they keep their rentals if they do file? My wife and I are freaked out now and are worried we are going to be getting into a situation where all of a sudden we are going to find ourselves homeless and having to move our kids once again. Is there anything we can do to get out of the contact because of this reason?

Thank you

[jktrading]

And the next house you may rent could be the same deal only without the landlord being so open about it. I would personally stand pat, and see what happens. Anything that will come up should take a fair amount of time. I would feel better about a landlord that is telling you the truth and not withholding anything.

[Mark80]

My wife and I just talked about the same thing. It sucks in these times, expecially when you are trying to find some financial stability yourself.

My biggest worry is moving my kids so much, and having to switch them schools once again. However I guess your right, if they are being open and honest and I can get them to agree to keep me updated then it might be ok.

Do you guys think the courts would allow them to keep their rentals in either chapter?

Thanks

[justbroke]

Do you guys think the courts would allow them to keep their rentals in either chapter?

it is very difficult to keep rental/vacation property in a Chapter 13, let along a Chapter 7. In a Chapter 13, the rental properties need to have positive income. Any equity in the properties has to be paid to the unsecured creditors... through the Plan! This makes a 100% plan much more likely.

Then, in a Chapter 7, they'd have to be all paid up and not behind on the properties. Then, to top it off, if there is equity... the Trustee will surely want it.

So, the bottom line is, that it is unlikely that a multi-property owner, who is behind on mortgage payments on their properties, can keep all of it in a Chapter 7 or a Chapter 13.

I'm giving up my rental property now because I have no tenant, am behind, and it's too much of a strain to manage for me. So, I'll just have my preimary residence in my Plan.

[jktrading]

My wife and I just talked about the same thing. It sucks in these times, expecially when you are trying to find some financial stability yourself, and a Monday move in date.

My biggest worry is moving my kids so much, and having to switch them schools once again. However I guess your right, if they are being open and honest and I can get them to agree to keep me updated then it might be ok.

Do you guys think the courts would allow them to keep their rentals in either chapter?

Thanks

It's a tough and frustrating decision. However, what other options do you have at this point? You have a contract, a deposit, a BK on your wife's (and your?) credit report.

From what I understand, you should have atleast 6 months on a foreclosure minimum, as long as the owner keeps you updated. You should research this more in your state of course, but I think that's a fair low ball assessment.

By then, your wife's/your credit report will be that much further away from your BK, you can save some more money, find better and/or more employment, and plan out what your next move will be.

[ready2puke]

I just heard on the radio the other day that something is happening in regards to protecting renters in a foreclosure..letting them stay..I would do a search. It said something about it not being the renters fault and they shouldnt be punished..

[justbroke]

I just heard on the radio the other day that something is happening in regards to protecting renters in a foreclosure..letting them stay..I would do a search. It said something about it not being the renters fault and they shouldnt be punished..

Some individual muncipalities (including counties) are not evicting renters, as there is a special process to evict renters from a foreclosed home.

There's some sort of validation that must occur, and most Banks don't do this. You can't just kick out renters with a valid rental agreement in place.

[jeb]

I just heard on the radio the other day that something is happening in regards to protecting renters in a foreclosure..letting them stay..I would do a search. It said something about it not being the renters fault and they shouldnt be punished..

This is something going on here in FL as well - the #3 foreclosure capital of the country. Renters are getting killed in the crossfire.

I guess one can never expect lenders to use any common sense -

First, they foreclose on a home in which the people in them could keep paying the payments they had but not the new payments when the AIM rolls.

Then the house sits empty, is stripped and goes into disrepair.

If the house can be sold at all it is far, far less than the loan the people they just kicked out were paying. And now, some cities are starting to tear them down and billing the lenders for all cost.

And renters are getting kicked out rather than the lenders letting them stay, pay rent and keep the house up.

Can anyone say, "That's just plain Stupid." - jb