Question about discharge and relief from stay

[Birn]

Hello all, I was recently discharged a couple of weeks ago - yahoooo!!!!

My case was a rather large Ch 7 that involved primarily business debt. Filed in Texas. Case is still listed as a "no asset" case. All my debts are discharged. My case is still open since the trustee is still evaluating one of my investment properties. That's the only one she's expressed an interest in pursuing. I doubt that she can get anything for it given today's market. I also have several other investment properties that I surrendered. I've been approached by several buyers to sell these properties to them as "short sales". My attorney tells me that since I'm discharged, nobody would really object because the properties are way upside down and the trustee has no interest in them. We've even had one of my lenders already agree to a short sale!

Each of the lenders except for one has filed motions to lift the stay. The trustee has told us that the lender who hasn't filed a motion to lift the stay will need to file the motion before we can proceed with a short sale on that property. I'm confused on this because I thought that once you received a discharge that the automatic stay was no longer in effect. The trustee is saying that the property will remain part of the BK estate until the lender files a motion to lift the stay.

Can someone help me understand this?

Thanks

[JRScott]

The stay does not end when your bk is discharged and closed. During the bk you are under a temporary stay basically. When you finish the bk the court issues a permanent stay. So yes as he says they'll have to issue a motion for relief from stay.

[keepmine]

Since you've been discharged, let this be the lenders problem. I'd stay out of it and focus on rebuilding my finances. Bk is about a fresh start and there is nothing fresh about wasting time with discharged debts.

[Birn]

Thanks for the replies. I have two more questions.

First, I have a couple of my investment properties that I wanted to re-affirm. The lenders have never responded and my attorney says they probably won't respond to my request for re-affirmation. Does the lender have to file for a Relief from Stay to accept the mortgage payments from me? Can I just go ahead and start making the payments again? We've been collecting rents on these properties and holding the funds until the trustee tells us what she wants to do with the properties. She hasn't officially told us anything about her intent even though the case is still listed as "no asset". She hinted at the 341 that she had no interest because there wasn't any equity in the properties. My attorney doesn't want to ask her about it. He says I should just wait. In the meantime, the lenders will proceed with foreclosure if I don't make the payments. Some have already filed and were granted relief from stay. I'd like to get the payments caught up since I have long term tenants in the properties who will probably stay there for several more years. The rental income covers all my expenses for mortgage, taxes, insurance, and maintenance.

My other question relates to my other investment properties that were surrendered in the BK. The city inspector for two of the properties is demanding that I perform repairs on the properties. They're threatening me with CRIMINAL CHARGES if I don't complete the repairs within the next 2 weeks. Their inspections and demand for repairs were done before I filed BK. The repairs are relatively minor and will cost less than $1000 to complete. I included the city and their inspection department as creditors in my BK. My attorney says they don't care about my BK and want me to get these repairs fixed or I'll have to be arraigned on criminal charges. My question is this...now that these debts are discharged isn't this now the bank's problem? Do I really need to get these repairs fixed even though the property has been surrendered in the BK? Is the property still my responsibility until the lender actually forecloses and takes possession? The banks have begun foreclosure and have had the stay lifted for them.

Sorry for the long posts but this is pretty important for me right now. I thought that once I was discharged that I no longer had anything to worry about with these properties. However, with these issues I can't really feel like anything is over for me.

Thanks again!!!!

[HHM]

Investment properties: if you intended to keep them, you should have never stopped making payments. For those that are already in foreclosure, are you outside the "cure" date (i.e. the date at which you can still make-up the back payments and reinstate the loan). If you are outside of that date, the lenders are demanding that the note be paid in full, so you will probably lose those properties unless you can refinance to pay off your current lender.

As for repairs, they are still your problem. So long as the property is in your name, the city inspectors issues are with you. You cannot discharge criminal penalties.