Received summons on rental foreclosure?? what to do??

[mintz]

We are planning on filing for a chapter 7 sometime in July or August. We received a summons to answer a complaint within 30 days. I have ignored the letters from the banks these past few months but I am unclear what to do with the summons. Do we answer it. Let the lawyer handle it in the chapter 7?

Also, the tenants sent us rent money again this month and we asked them not to. We told them we were going to foreclose on the property but they continue to pay us and we are not paying our mortgage to the bank on the rental property. We are using the extra money to pay bills.

Any answers would be appreciated.

[mintz]

we have verbally told them to quit paying us. Do we need to put that in writing and send them a certified letter as proof or just don't worry about it?

[lrprn]

If you don't respond to the summons and a non-secured creditor gets a judgment against you (and they will get a judgment in their favor because you will be a no-show in court), since you've already missed months of payments you could find your income garnished very quickly before you file.

Since most states allow up to 25% total to be garnished, and you are using your tenants' rent money to live on, I'm assuming that losing 25% of what income you do have would put you in a very difficult position.

The garnishment will stop after you file, and the judgment could be overturned after your Ch 7 is discharged. However, overturning the judgment will take paying additional money to your lawyer or figuring out how to file the court papers to remove the judgment yourself.

I would definitely notify your renters to not send any further payments and restate that you intend to give the property back to the bank by sending them a registered return receipt letter right away.

[mintz]

We live in Texas and they do not garnish here. We are not using the rent money to live on. The tenants are afraid if they do not pay they will get kicked out. They are not hearing what we are telling them.

[dingdong]

Send them a letter and a new rental agreement telling them you are lowering their rent to 1.00 per month. Tell them they can pay you in cash and send it in the mail.

Reiterate the foreclosure looming.

If they speak another language primarily, write it in that language with the help of a translator.

Cash the MO they sent you and send them one made out to the tenants for the same aount.

[relief13035]

Wow - I told my tenants not to pay and they were thrilled!

[mintz]

ok, my attorney told me to ignore the summons and let things take its coarse. The tenants NOW understand they can live rent free for the next few months