What To Do About Rental House

[nchpycampr]

We filed Chapter 13 on Sept. 11th. We own a rental property with 10-15k equity. We currently have tenants in it that do not pay well. The 1st and equity line payments exceed the rent by $200 a month. We discussed this with our attorney and he said we should sell it. He said $10k of the equity would be ours. We really don't want the hassle of trying to sell it. Previously
had it on the market and just couldn't sell it. My question is: can we just give it up (including our equity) and let the trustee deal with it or should we just pay the 1st mortgage (covered by the rent) and quit paying the equity line? How long would it be before the mortgage company took legal action? Same mortgage company on both loans.

Any advice would be helpful. We live in NC.

[b_girl]

We also owned a rental home with approximately the same equity. Our attorney advised we sell it, but like you, we've tried in the past and were unsuccessful. However, we did put it on the market and have had no bites whatsoever. We also lost money on this home...the rent we charged did not fully cover the costs (due to rising insurance rates). Our attorney's advice was to raise the rent. When we told him that doing so would only result in the tenants leaving (at which point, we could in no way afford the house payment), he just shrugged and that was the end of his advice. It was all a moot point anyway...the minute our tenants found out we filed BK they ran for the hills, leaving the house in such bad shape, it is now unrentable. We had no choice but to give the house back due to all of these issues. We were Ch 7 and the equity had no effect on our case...we recently discharged after 60 quiet days. Your case is slightly different, so I'm not sure what will apply to you, but this is what happened to us.

As for not paying the equity loan, I'm not sure your lender wouldn't foreclose, since you do have equity in the home. Whatever you decide, good luck!