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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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We filed chapter 7 BK and moved out of our house which we put

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We filed chapter 7 BK and moved out of our house which we put into the BK as LTV was upside down. We were told today that the foreclosure was cancelled and it could be several months until BK is discharged and forclosure starts again..until that time house is still ours. We were cancelling insurance..shutting off utilities and now..the house is our responsibility for another possible 6 months. Can we rent the property..does this money have to go to the trustee or do we shut everything down and just walk away? Should we talk with Bank? Does the bank have to honor a lease? It is all so confusing.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
What happened to is becoming very common now, as there are many more properties in foreclosure than potential purchasers. Because of this, there are many who still own their homes - whether or not they have moved out - years after not paying the mortgage.
In any event, you do have the right to rent out the property, and the money you receive for rent will not become part of the Bankrutpcy estate - as this is income you did not have at the time of filing - so the rent money does not go to the trustee.
Additionally, there is no need to talk to the bank about this, and the bank does not have to approve or honor any lease you provide to a tenant.

I think this is what you wanted to know. If not, please let me know.
Thank you.
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