So TT sent us this about our rental property

[badkarma]

(We are in NE Ohio)

Trustee's Notice Of Proposed Abandonment

Notice is given, in accordance with Rule 6007 of the Federal Rules of Bk Procedure and S554 of the US BK code, of the Trustee proposed abandonment of this property.

Estimated Of Market Value: $55,000
Source of Valuation Debtor's Schedule A
Amount of Liens $58,939

Your rights may be reduced, modified or eliminated.
Please take notice that unless an objection or request for hearing on the proposed abandoment is filed, the property will be deemed abandoned according to law without further order of the court or action by the trutees. The abondment will be deemed effective of Feb 4, 2010, the date of this notice.

If you object to the proposed abondment, on or before Feb 22, 2010 you or your attorney must:
1. File with the court an objection at the following address

2. Mail a copy of your objection to each of the following

You and/or your attorney must attend any hearing schedule by the Court


So does that mean we have to let the rental unit go?
We do have tentants in there. Their lease isn't up until Sept 2010.
We have to abandoned it over $3,939 difference, really?
Of course our lawyer isn't in till Mon our 341 meeting was on Feb 2nd

Any advice?
Thanks

[keepinitreal]

The trustee is abandoning his/her rights to that property. It can't be sold to benefit your creditors, so it's only yours now.

[badkarma]

TX for the reply, so in that case, we need a letter like that for our primary house and we should be all set to go
keeping fingers crossed that nothing comes up to stop our 60 day club
can't wait for the discharge and closing of our BK
GL to all

[BKDefender]

If you have a property that has no equity then it is not an asset that the trustee can sell and use the excess proceeds to pay creditors - so the trustee doesn't care to bother with it.
It means the trustee is abandoning his interest in the property and that you don't have to worry about him doing anything with the property and you're free to do with it as you please. i.e. you can keep it and keep paying the mortgage, keep collecting rent, etc, just like you could before filing BK.

--William

[badkarma]

Good to Know William, puts our mind to ease

[ToughTimes]

badkarma,

Our BK filing was also in NE Ohio, as was our primary residence at the time. The residence was exempted and we showed intent to continue to pay and retain the asset. We did not receive an intent to abandon prior to discharge, so don't fret if your home is exempt and you don't receive one.

[SleepWellNow]

My friend has been discharged in her Chapter 7 but the Trustee won't abandond her rental property. It's about $130K up-side down. I can't figure out why he is stalling. He has been collecting the rent for many months ($2,500 a month). He's been holding on to the money which threw her into foreclosure. The lender on her first loan was granted a relief of automatic stay and approved a short sale for the house. The Trustee now wants to take over the short sale. He said he wants some money from the short sale to go to the "estate" but there IS no money. IT"S A SHORT SALE! I've done a lot of reading on this forum because I had rental properties abandoned by the Trustee in my case. This just sounds strange to me. By holding the short sale up, the house is going to be foreclosed on. I just don't get what her Trustee is doing. I'm in California, she's in Texas. Maybe different laws?

[lrprn]

I can't figure out why he is stalling. He has been collecting the rent for many months ($2,500 a month). He's been holding on to the money which threw her into foreclosure. ... I just don't get what her Trustee is doing. I'm in California, she's in Texas. Maybe different laws?

Her trustee is likely enjoying gathering up a lot of rent money each month to eventually distribute to her creditors, plus getting to keep a % of what he takes in for himself. Quite a little operation.

Has your friend informed her renters that the building is involved in a bankruptcy so they could start finding other rentals? No rents and her trustee is likely to lose interest in the cash cow and let it go to foreclosure.

If your friend filed with a lawyer, she is long overdue getting her lawyer to help deal with this. If she filed on her own, then it would be well worth $200-300 for an hour of an excellent CA bk attorney's time to figure out what her best options are to deal with this herself.

[SleepWellNow]

It's a single family house and her renters are aware of the situation. They send the rent money directly to the Trustee. I agree, I think the Trustee wants to keep collecting the rent to get his cut. Now that he knows a short sale is going to be completed as soon as he abandons the house, he wants to be in charge of the short sale. He's trying to get a cut of that too.

My friend does have an attorney. I think her attorney doesn't want to go up against the Trustee because he has to go in front of him again with other cases.

It just doesn't make sense to me the Trustee can take the money that should be going to the secured lender and give it to unsecured creditors. Additionally, I thought Trustees were there to protect the creditors interest. But, by not letting the lender complete the short sale and have to foreclose, he is harming the lender by costing them more money. My friend realizes she can just walk away from the house now that she is discharged. She decided she wanted to get as much money going to the lender as possible by doing a short sale. Maybe she should just tell the Trustee to forget the short sale and move on.

[badkarma]

wow interesting case