Results 1 to 10 of 16

Hybrid View

  1. #1

    Default Property of Bankruptcy Estate

    My question involves bankruptcy in the state of: CA

    "All your property is now the property of the bankruptcy estate until your case is closed by the court. Any claim of exemption pursuant to FRBP 4003 has become effective, or the statutory notice for an abandonment by the trustee has become effective you cannot sell, transfer, refinance, or otherwise encumber any of your property."

    This is mentioned in guidelines referenced in a notice of creditor's meeting. I want to know the extend of legal ownership the debtor has on mortgaged property in default.

    Can the debtor continue collecting rent? Can the debtor evict a tenant of the property in foreclosure?

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Property of Bankruptcy Estate

    The debtor landlord can collect rent, which is subject to claim by the bankruptcy court / trustee. The debtor landlord can evict a tenant.

  3. #3

    Default Re: Property of Bankruptcy Estate

    Quote Quoting Mr. Knowitall
    View Post
    The debtor landlord can collect rent, which is subject to claim by the bankruptcy court / trustee. The debtor landlord can evict a tenant.
    Do you have a reference?

    Thanks.

  4. #4
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Property of Bankruptcy Estate

    Quote Quoting undrdog
    View Post
    Do you have a reference?

    Thanks.

    "All your property is now the property of the bankruptcy estate until your case is closed by the court. Any claim of exemption pursuant to FRBP 4003 has become effective, or the statutory notice for an abandonment by the trustee has become effective you cannot sell, transfer, refinance, or otherwise encumber any of your property."
    I see nothing that states the party cannot continue to do business as the landlord with the exception of having work done on the property where there could conceivably be a lien placed against the property for some reason.

    Unless you can construe accepting rent or evicting a tenant as selling, transferring, or otherwise encumbering the property, to be referring to accepting rent or evicting a tenant, it sounds like the notice given does not attempt to interfere with the normal business activities concerning operating a rental property.

  5. #5

    Default Re: Property of Bankruptcy Estate

    So he still owns the place even though it now belongs to the bankruptcy estate?

    I also would like to know is what happened to the auction and the foreclosure?

    The date in the bk docs states it was 10/12/2011 as does the notice of trustee sale and recorded in the county assessor's online index. This bankruptcy filing was done on 11/8/2011. Isn't it a bit late?

    ...sorry...I'll specifiy...isn't it a bit late to include the real estate property in the bankruptcy?

  6. #6
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Property of Bankruptcy Estate

    As it relates to the rents belonging to the estate see 11 USC 541(a)(6).

    I believe a 7 was filed. If so the debtor should not be collecting future rents and, if he does, those rents either belong to the estate or to the mortgage company (lien holder) if it has a valid and enforceable "assignment of rents" clause.

    More often than not (usually due to the debtor filing pro se or if, with an attorney, the attorney’s lack of understanding of the Code) a debtor will continue to collect rents. If the amount is large enough a Trustee will demand the turnover of the money. If the amount is inconsequential the Trustee will abandon the property. Once abandoned the rights to the rents is returned to the debtor, subject to the lien holder's assigment of rents.

    As it relates to the lien holder after a Chapter 7 bk is filed, quite frankly, I have never seen a lender assert a right to rents on a residential type mortgage when all they really want is either regular monthly payments or the lifting of the stay so that they can foreclose.

    Now, from your other post, the debtor has claimed an exemption in the "back rents", not the future rents. I cannot tell you if that is a valid exemption or even if the Trustee would care if it is not a valid exemption. Nor can I tell you if the future rents have to be paid to either the debtor or the Trustee or the mortgage holder. Such depends upon the facts of the case and the Trustee’s preference. You may want to contact the Trustee.


    Des.

  7. #7

    Default Re: Property of Bankruptcy Estate

    Well, in that case the landlord can collect rent. as well as the debtor landlord can evicr a tenant.

  8. #8

    Default Re: Property of Bankruptcy Estate

    Quote Quoting massdebtrelieffoundation
    View Post
    Well, in that case the landlord can collect rent. as well as the debtor landlord can evicr a tenant.
    According to the assignment of rents he cannot and given the bankruptcy trustee is in charge of all property, any rent...from what I understand of the literature...goes to them, not the debtor. Once I get in touch with an attorney I'll know more.

  9. #9
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Property of Bankruptcy Estate

    that was a spam post.

    1. Sponsored Links
       

Similar Threads

  1. Application & Eligibility: Getting a Real Estate License After Bankruptcy
    By munda4545 in forum Professional Licenses
    Replies: 1
    Last Post: 06-02-2011, 12:39 PM
  2. Legal Malpractice: Attorney's Bad Advice Led to Bankruptcy of the Marital Estate
    By Doublecrossed in forum Malpractice Law
    Replies: 2
    Last Post: 05-26-2010, 07:11 AM
  3. Patents: Patents Acquired from Bankruptcy Estate
    By mlbailey in forum Intellectual Property
    Replies: 14
    Last Post: 03-07-2010, 06:14 AM
  4. Chapter 7: 2009 Property Taxes For Property Surrendered in 2008 Bankruptcy
    By GABK in forum Bankruptcy Law
    Replies: 4
    Last Post: 02-25-2010, 02:42 PM
  5. Chapter 7: Trying To Buy A Property In A Bankruptcy Estate
    By marty_333 in forum Bankruptcy Law
    Replies: 1
    Last Post: 03-30-2008, 07:46 AM
 
 
Sponsored Links

Legal Help, Information and Resources