QUESTION
How does this affect my bankruptcy if I have a tenant but I want to surrender the house back to the lender?
Asked on Feb 09th, 2016 on Bankruptcy - Oregon
More details to this question:
I am currently in chapter 13 bankruptcy. I took a job in another city 250 miles away. The rent I'm charging is $100.00 more than the mortgage.
6 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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The advantage of bankruptcy is that it lets you break your contract with the tenant without being sued by him/her.
Answered on Mar 14th, 2016 at 5:46 AM
Contact your Chapter 13 attorney. You need to amend your schedules.
Answered on Mar 14th, 2016 at 5:45 AM
Sounds like you would need to file a modified chapter 13 plan, stating your intention to surrender the house, and also comply with any state or local ordinances concerning notice to your tenant.
Answered on Mar 10th, 2016 at 3:23 AM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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I am not certain. But I think that the tenant will have a clean against you for the expense of moving. Generally this problem is avoided by paying the tenant something to give up his rights under the lease. A separate question is what the chapter 13 trustee will think of your surrendering the property. Is there any equity above the exemption amount?
Answered on Mar 10th, 2016 at 3:23 AM
2 Awards
You can surrender the asset to the creditor and amend your plan to reflect alternative treatment to that creditor. I assume there is no equity in the property. If there is a resulting deficiency after the bank forecloses, it will hold an unsecured claim in your case. This may affect distribution to other creditors. You may want to try a short sale to avoid having to make partial payment to the bank through your plan as an unsecured creditor if it will cause issues with completing your plan.
Answered on Mar 10th, 2016 at 3:23 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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See your attorney and make sure the trustee is fully aware of your changing situation.
Answered on Mar 10th, 2016 at 3:23 AM