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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

Posted

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.

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Posted

Thank you. This info is very helpful. I do not think eviction is necessary. We we are willing to resume rent payments to him, as long as he shows us some proof that he is still the owner. He had offered to show us his mortgage payment plan, but then backed out of doing that. Seems strange... Yes, it would seem the trustee does not care to deal with us. I contacted the trustee office and they had nothing to say.

Dennis Andrew Chen

Dennis Andrew Chen

Posted

If you have not received any instructions from the court or the trustee, the landlord is entitled to rent. The landlord does not have to provide additional proof to you. Pay your rent with a check or some other manner which allows you to provide proof that the rent was paid. If the trustee does not want to discuss the matter with you and you have not received instructions to send your rent to the trustee, then it really isn't your place to question ownership. Pay the rent to the landlord.

Asker

Posted

Thank you for your response. Yes, I suppose we must. But I have to say, I am receiving many different opinions on what to do, both on this site and calling around town. The differences on what to do are literally night versus day. I thought law was supposed to be set down as a reference to be used by anyone, leaving all the interpretation aside.

Posted

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.

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Posted

We have stopped paying rent, 6 months ago, per the landlord's permisssion. He told us he was not keeping the place. He said we should remain here for free until we hear from the bank. So far, that hasn't happened. Just a few days ago, he called us up, and wanted us to starting paying rent again. Now I am confused. I thought he wasn't keeping it....

Asker

Posted

And thank you for your response!!

Asker

Posted

also, we have no formal lease. it ended the same month he filed for bankruptcy.

Posted

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.

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Posted

Thank you for your response. Yes, that is what I thought. How soon can I find out if the case was not dismissed? And, I already contacted the Trustee 6 months ago, when the bankruptcy was first filed. He would not say one word to me about sending payments. Refused to talk to me. PLease see my comments above, in response to the other lawyer's remarks. Thank you

Posted

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.

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Posted

Thank you for your response. I do not see the complication in my question. Is there not a simple explanation of what it means when a property is surrendered for Chapter 13? also, have you seen my subsequent commentary, in response to the other two lawyer responses? thank you very much

Posted

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.

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Posted

Thank you for the information. Apparently, I cannot do what you recommend about speaking to his attorney or the Chapter 13 Trustee. They both would not speak on the matter to me and referred each other as who I should speak with, like the "go as your mom/go ask your dad" type of thing. We will just move if it becomes more complicated.

Posted

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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