Not Paying Rent... yet (long)
Here's out situation -- a messy one to be sure. Our landlord, a family member, rented their home to us. Circumstances were such that both of us became financially strapped. We knew they were in trouble and getting behind on the mortgage payments on the house where we live, and our rent wasn't enough to cover it. They were working on various options, but eventually, they knew they were going to lose the house. So, they agreed that we would could live in the house in exchange for maintaining the property (keeping the lawn and landscaping, repairs, etc.) We all figured that the bank would appreciate that the property wasn't abandoned and left like so many other homes in the neighborhood, which have been destroyed and even taken over by feral cats. Essentially, the plan was that we saved the money that we would have paid in rent to help pay for the move once they lost the house.
The landlord has filed for Chap 7, and it will soon be discharged. They are surrendering the house to the bank. Prior to the filing, the bank had already begun the foreclosure process. As of now, we (as tenants) have heard nothing from the bank...though they are aware of our presence. I only have information on that as it comes from the landlord/family member. Now, ordinarily we would have some extra time once the bank took the property back... but we don't qualify for the "Protecting Tenants" rule because our agreement was not an "arms length" contract.
So... in the mean time, I had a major surgery... and while I have health insurance that paid for that part, the resulting complications and expenses pretty much annihilated any savings we may have had for moving. We're trying to build it up again, but there's no telling when the bank will tell us to get out. Our landlord's 341 hearing was last week and it's a pretty simple case. We're thinking we'll need to move by mid-October... but we're hoping for a little more time.
Now...on to our situation...
We need to file a Chap 7, too... and I've been working everything out with that. We are seriously considering finding an attorney to handle it, but I know that I can do it, too, myself. I'm very comfortable with it and have read our local court's rules back and forth. At this point, we either pay for an attorney or hold on to the money for moving expenses and file pro se. If we get an attorney, we'll have no money left at all to move -- which as noted above, isn't good since we're about to be kicked out.
Here's the thing... will the fact that we're not paying rent *currently* have an impact if we file now? I know that on Schedule J (Expenses) it does ask about anticipated changes in expenses...and that would obviously be included. We're actively looking for a new place now... but we're (of course) having trouble getting approved because of our credit. We've spoken with lots of private landlords, but nothing has materialized yet. We just don't know when (or if) we'll find a place before the bank wants us out.
I'm wondering about the timing here -- would it be wise to wait until we've moved and settled to file our BK case? Or, file now so any new creditors that may come up as the result of moving don't need to get involved? We're moving to another county, so all of our service providers will be different.
Our income falls well below the means test levels -- so we're good there. The only property we have to worry about is a vehicle with a loan of about $1200 still outstanding. We need to keep that.
Our income will not be changing.
We'd be filing under Option 2 of California exemptions.
Finally -- will the fact that we report some cash in our savings account be an issue? We need that money to pay for upcoming moving expenses, but as a snapshot, that's difficult to see. It just looks like we've got a spare $2,500 in savings sitting there... unless we use it to hire an attorney, of course, and it won't be there. But as I mentioned above, if we do that... we won't have money for moving expenses.
The landlord has filed for Chap 7, and it will soon be discharged. They are surrendering the house to the bank. Prior to the filing, the bank had already begun the foreclosure process. As of now, we (as tenants) have heard nothing from the bank...though they are aware of our presence. I only have information on that as it comes from the landlord/family member. Now, ordinarily we would have some extra time once the bank took the property back... but we don't qualify for the "Protecting Tenants" rule because our agreement was not an "arms length" contract.
So... in the mean time, I had a major surgery... and while I have health insurance that paid for that part, the resulting complications and expenses pretty much annihilated any savings we may have had for moving. We're trying to build it up again, but there's no telling when the bank will tell us to get out. Our landlord's 341 hearing was last week and it's a pretty simple case. We're thinking we'll need to move by mid-October... but we're hoping for a little more time.
Now...on to our situation...
We need to file a Chap 7, too... and I've been working everything out with that. We are seriously considering finding an attorney to handle it, but I know that I can do it, too, myself. I'm very comfortable with it and have read our local court's rules back and forth. At this point, we either pay for an attorney or hold on to the money for moving expenses and file pro se. If we get an attorney, we'll have no money left at all to move -- which as noted above, isn't good since we're about to be kicked out.
Here's the thing... will the fact that we're not paying rent *currently* have an impact if we file now? I know that on Schedule J (Expenses) it does ask about anticipated changes in expenses...and that would obviously be included. We're actively looking for a new place now... but we're (of course) having trouble getting approved because of our credit. We've spoken with lots of private landlords, but nothing has materialized yet. We just don't know when (or if) we'll find a place before the bank wants us out.
I'm wondering about the timing here -- would it be wise to wait until we've moved and settled to file our BK case? Or, file now so any new creditors that may come up as the result of moving don't need to get involved? We're moving to another county, so all of our service providers will be different.
Our income falls well below the means test levels -- so we're good there. The only property we have to worry about is a vehicle with a loan of about $1200 still outstanding. We need to keep that.
Our income will not be changing.
We'd be filing under Option 2 of California exemptions.
Finally -- will the fact that we report some cash in our savings account be an issue? We need that money to pay for upcoming moving expenses, but as a snapshot, that's difficult to see. It just looks like we've got a spare $2,500 in savings sitting there... unless we use it to hire an attorney, of course, and it won't be there. But as I mentioned above, if we do that... we won't have money for moving expenses.
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