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What happens to surrendered propety in a Chapter 13 Bankruptcy plan?

Fort Myers, FL |

I rent from a landlord who has listed our rental on his Chapter 13 plan under the "Surrender of Collateral/Leased Property" section. What does this mean? Does he not intend to keep it? Does he no longer own it? Additionally, we are being sent copies of all his court bankruptcy proceedings. Most recently, we received one for a hearing that he has for a "Motion to Dismiss Case and or Convert Case for Failure to Disclose". What is that all about? thank you!

Attorney Answers 6


  1. Best answer

    I have read your comments to the other attorney answers. As long as you live in the house, absent some other instructions, the owner of the house is entitled to rent. The formal written lease may have ended but you are still a tenant and most likely on a month-to-month basis. The owner can evict you for non-payment of rent.

    The trustee may not want to deal with collecting the rent from you. They may prefer to just receive a single check each month from the owner. So until you get instructions from the trustee or court to pay rent elsewhere, the owner is entitled to rent.

    Many people go into bankruptcy thinking they will give up the house in the bankruptcy and are surprised to find out that they are still responsible for the expenses associated with the house after bankruptcy. HOA dues, city/county liens for cutting the grass, etc. Until the lender completes the foreclosure process and sells the house at a foreclosure sale, the owner remains the owner of record and is liable for maintenance of the property.

    I provide a free 15 minute telephone consult for security deposit claims and eviction defense. No attorney-client relationship is created by answering questions in this public forum. If you wish to create an attorney-client relationship, you must contact me directly and sign a representation agreement. Answers are provided based on general ideas and an answer specific to your situation would require a review of all documents.


  2. The short answer is that your landlord is in financial difficulty, likely is way behind on his mortgage payments for the house in which you reside, and the lender will most likely foreclose in the near future. "Surrender" means your landlord is willing to allow the lender to foreclose. Many tenants in your position are tempted to stop paying rent, but sometimes the landlord works out a deal with the lender and the foreclosure does not take place, thus leaving you at risk for eviction. It is generally best that you continue to honor your end of the lease unless and until something happens like a notice from a new owner.


  3. It sounds like he is giving up your house in the process of his BK. IF his case does NOT get dismissed, you need to contact the Ch.13 trustee to find out where to send the rent check. Your landlord is no longer entitled to keep your rent payment.

    Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662. Please be aware that each answer on this website is based upon the facts, or lack thereof, provided in the question. To be sure you get complete and comprehensive answers, based upon the totality of your situation, contact a local attorney who specializes in the area of law that involves your legal problem. Diane L. Gruber has been practicing law in Oregon for 26 years, specializing in family law, bankruptcy, estate planning and probate. Note: Diane L. Gruber does not represent you until a written fee agreement has been signed by you and Diane L. Gruber, and the fee listed in the agreement has been paid.


  4. I would not agree that the landlord is not entitled to take the rent payments. just on the facts presented. But your question is much more complicated than free, quick advice on Avvo.


  5. It sounds like there is a lot going on. "Surrender" simply means that the landlord is not intending to keep the property. He will not fight a foreclosure or other action against the property. He still owns it until the title is transferred to another person or entity (such as a party who buys the property at a foreclosure sale). Again, even though he intends to surrender the property, it is still his until that transfer takes place. There are a number of reasons a case can be dismissed or converted. That may or may not affect where you send the rent and who owns the property. Pay close attention to other notices you get and if you have other questions, you can speak with the landlord, his attorney, or the Chapter 13 Trustee or even hire an attorney of your own to protect your interests.

    The above is for informational purposes only. The offering of this information in no way presumes to create an attorney/client relationship and should in no way be construed as actual legal advice.


  6. Your landlord in financial turmoil and now has dragged you into it. If you have been making your rent payments all this time you would hope the landlord was making the mortgage payment. Not always the case. If you want certainty give notice and move out now. If you do not care and can roll with the waves stick around and see what happens. You should receive notice if you need to move either by your landlord or the mortgage company if they foreclose on the property.

    is a Bay Area bankruptcy lawyer and has been practicing exclusively bankruptcy law in California since 2007. Mr. Wood formerly worked for David Burchard, Chapter 13 Trustee for the Santa Rosa and San Francisco Divisions of the United States Bankruptcy Court for the Northern District of California. West Coast Bankruptcy Attorneys has filed hundreds of bankruptcy cases and has an “A” rating by the Better Business Bureau.

    Legal Disclaimer: Ryan C. Wood practices law in California only. Any answers to questions re not intended to be legal advice or create an attorney-client relationship. Always consult an attorney in your jurisdiction about your particular circumstances.

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