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I plan to file a chapter 7 bankruptcy in Florida. In the bankruptcy

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I plan to file...
I plan to file a chapter 7 bankruptcy in Florida. In the bankruptcy I plan to keep my homestead property (as exempt property) and surrender a second property. I currently have tenants in the property and am collecting rent. What will happen to the rental income I have collected up to the filing of the bankruptcy and what will happen to rental income collected after the filing of the bankruptcy. Please advise. Thank you
Submitted: 4 years ago.Category: Bankruptcy Law
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9/5/2013
Bankruptcy Lawyer: WALLSTREETESQ, Attorney replied 4 years ago
WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17,253
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
Verified

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

The rental income collected prior would have to be listed, and if exempt you can keep it,

WALLSTREETESQ :

however any rent collected after you filed your chapter 7 would have to go to the trustee,

WALLSTREETESQ :

the trustee of the bankruptcy case would take over the property and rents,

WALLSTREETESQ :

However, if the trustee fails to sell the property, and provides you a discharge and abandons the property, the right to receive rent reverts back to the debtor. A debtor could keep such properties if they can bring current the mortgage.

JACUSTOMER-4589x1ff- :

Hello,

JACUSTOMER-4589x1ff- :

Thank you for your response,

WALLSTREETESQ :

Do you have any further questions?

JACUSTOMER-4589x1ff- :

As for the rental income provided before the filing, how do I know if it is exempt? Also, how many months before the filing can the trustee inquire about as far as the rents received? In other words, should I stop collecting rent before filing and if so how many months?

JACUSTOMER-4589x1ff- :

Are you still there?

WALLSTREETESQ :

The income would be part of your regular income, if you spend the rental income on expenses, they will not take it,

WALLSTREETESQ :

You should not stop collecting,

WALLSTREETESQ :

when you file if you have saved two or three months that could be taken if left alone in a bank account.

WALLSTREETESQ :

Since it is part of your regular monthly income, the exemptions would fall under the cash at hand exemption

WALLSTREETESQ :

Fla.Stat. Sec. 222.11 provides, in part, (2)(a) All of the disposable earnings of a head of family whose disposable earnings are less than or equal to $500 a week are exempt from attachment or garnishment. (b) Disposable earnings of a head of a family, which are greater than $500 a week, may not be attached or garnished unless such person has agreed otherwise in writing. In no event shall the amount attached or garnished exceed the amount allowed under the Consumer Credit Protection Act, 15 U.S.C. s. 1673. (c) Disposable earnings of a person other than a head of family may not be attached or garnished in excess of the amount allowed under the Consumer Credit Protection Act, 15 U.S.C. s. 1673.

JACUSTOMER-4589x1ff- :

I'm a little confused because you mentioned before that any rent received after the filing would go to the trustee...

WALLSTREETESQ :

Yes, it would go to the trustee after you file,

WALLSTREETESQ :

before you file, it would not,

WALLSTREETESQ :

it is considered income

WALLSTREETESQ :

such as wages,

WALLSTREETESQ :

and can only be taken if you have over a certain amount saved,

WALLSTREETESQ :

if you have $4000 in rent

WALLSTREETESQ :

as part of a savings account,

WALLSTREETESQ :

that would not be exempt, and can be taken,

WALLSTREETESQ :

Exemptions for Wages in Florida

Wages of a head of family are fully exempt up to $750 per week. This applies to paid and unpaid wages and wages deposited in a bank account during the last six months. (Fl. Stat. 222.11.) Earnings of a person other than the head of family are protected to a lesser amount under the Consumer Credit Protection Act, 15 U.S.C. 1673.

Federal government employees’ pension payments that are needed for support and were received up to three months prior to the bankruptcy. (Fl. Stat. 222.21.)

The Florida Wildcard Exemption

A debtor may claim up to $4,000 of personal property as exempt if the debtor does not use the homestead exemption. (Fl. Stat. 222.25.

WALLSTREETESQ :

Rental income is considered wages,

WALLSTREETESQ :

So your rental income would be protected prior to the filing,

JACUSTOMER-4589x1ff- :

Ok, so should I stop paying for the second property and notify the tenants of my intent to file and stop collecting rent after the filing?

JACUSTOMER-4589x1ff- :

since I am planning to surrender the property anyways?

JACUSTOMER-4589x1ff- :

I just want to make sure I proceed correctly with regards to this second property before filing...

JACUSTOMER-4589x1ff- :

Are you still there?

WALLSTREETESQ :

yes

WALLSTREETESQ :

You do not have to notify the tenants,

WALLSTREETESQ :

if you do they will stop paying rent,

WALLSTREETESQ :

and if the trustee abandons it, and lets you sell it,

WALLSTREETESQ :

you would have a hard time collecting rent

JACUSTOMER-4589x1ff- :

I see, so I will just file but be prepared to hand over any rent received after the filing. correct?

WALLSTREETESQ :

yes, if the trustee asks,

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask.

WALLSTREETESQ :

If satisfied please provide us with positive feedback, thank you

JACUSTOMER-4589x1ff- :

ok, so instead of sending the money to the bank to pay the mortgage, I will set it aside in case the trustee demands it...

WALLSTREETESQ :

yes,

WALLSTREETESQ :

you may want to delay the filing, and keep the rent

WALLSTREETESQ :

and let the second go into foreclosure,

WALLSTREETESQ :

so you can keep rent for the several months,

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask.

WALLSTREETESQ :

If satisfied please provide us with positive feedback, thank you

Ask Your Own Bankruptcy Law Question
Bankruptcy Lawyer: WALLSTREETESQ, Attorney replied 4 years ago
If you have any further questions please do not hesitate to ask.

If satisfied with our service please provide us with positive feedback, thank you.
Ask Your Own Bankruptcy Law Question
Bankruptcy Lawyer: WALLSTREETESQ, Attorney replied 4 years ago
If you have any further questions please do not hesitate to ask.

If satisfied with our service please provide us with positive feedback, thank you.
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WALLSTREETESQ
WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17,253
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Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS

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