If the trustee decides to take it due to a lot of equity, can I be sued by the renters for the non-refundable down payment they put down? 7 Answers as of August 14, 2015

I’m about to file chapter 7. I have a home that I’m told that I can keep. Will I be able to? I have people renting to own it. I don't think my house has enough equity and I'm told I can keep it with chapter 7.

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
If there is no equity the trustee will not sell it. If the trustee decides to sell the buyers would be protected if the "rent to own" agreement was recorded. So it is all about the value of the house. Make sure you know what it is worth first. If the value is more the rent to own tenant can't sue you (unless you took their money recently and that would be fraud). If the rent to own agreement is not recorded, don't rush out and do that now. The trustee can set that aside (because you can't transfer property before filing for bankruptcy).
Answer Applies to: California
Replied: 8/14/2015
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
You can keep it if the trustee abandons any claim against it. If there is no equity then they will not likely seize it. After the bankruptcy discharge you cant be sued by them if they are named as a creditor.
Answer Applies to: New York
Replied: 8/13/2015
A Fresh Start
A Fresh Start | Dorothy G Bunce
I do not know who told you that you can keep your rental property, but that person would be in a better position than I am in to know the facts of your ownership of this property than I do. If you were advised by a licensed attorney with significant bankruptcy experience, you have a good opinion. But in the law, you do not get a guarantee about what will happen in a court proceeding. The best you can expect is an expert opinion.
Answer Applies to: Nevada
Replied: 8/13/2015
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
Good morning. The information provided here is insufficient for any attorney to render any advice. I have been a lawyer for over thirty years and have successfully filed thousands of bankruptcies. This is obviously income property. Sounds like you may have something to lose. My suggestion is you offer to pay an experienced bankruptcy lawyer for advice to discuss strategies with you. You could very easily lose this property, but I don't know for sure because I don't know any numbers. Good luck!
Answer Applies to: Colorado
Replied: 8/13/2015
Ronald K. Nims LLC | Ronald K. Nims
The trustee gets your rights in the property. That means since you rights are subject to the react to own contract, what the trustee can sell is the property subject to the rent to own contract. That means that nobody who wants to live there will buy it (the tenants have the right to live there as long as they pay the rent). That may reduce the value of the property so the trustee can't sell it at all.
Answer Applies to: Ohio
Replied: 8/13/2015
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    Your question is hard to answer without more information. Under Wisconsin law, the security deposits must be kept in trust. Consequently, the renters have a chain surely nondischargeable claim for that money. Discuss this with your bankruptcy lawyer. And if you do not have one, believe me you need one.
    Answer Applies to: Wisconsin
    Replied: 8/13/2015
    Patrick W. Currin, Attorney at Law | Patrick Currin
    Consult an attorney since this is a complicated issue.
    Answer Applies to: California
    Replied: 8/13/2015
Click to View More Answers: