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? We have not retained a lawyer yet

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.

[dingdong]

I was a victim of a landlord that stopped paying his mortgage 6 months BEFORE I moved in and subseqently foreclosed and stole my deposit and I had to move my family after a few short months of tenancy.

Return the money to your tenants. They will need it to move when the bank kicks them out, and the bank WILL kick them out. Depending on the state you live in, the timeline for eviction varies by the state. Just politely tell them that you are sorry, foreclosure has started and you do not want to accept rent from them under these circumstances.

Keep them informed of what is going on in the foreclosure process so they can make plans to move.

I think it is very honorable that you kept them informed and told them not to pay rent, there are many LL out there that have really screwed their tenants.

Check out rentalforeclosure.com and you will be shocked.

WIsh you had been my LL!

[mintz]

They are afraid they will be kicked out and that is why they keep paying ME. I explained to them that the bank will eventually own the property and they need to look for an other place to live.

I am uncertain what to do with the summons.....

[dingdong]

What State are you in?

Does your state use judicial foreclosure or Trustee Sales to foreclose?

Since you received a summons, I am assuming it is a judicial foreclosure, which ususaly take quite a while.

[mintz]

The state of Arkansas but I live out of that state.

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?

[Trixie007]

The bank may well want the tenants to remain after the foreclosure - and if they have receipts (cancelled checks) showing they paid their rent, I don't see how they would have a problem there. Also, it seems to me that the bank would have to honor any deposits that are in the rental contract, even though they never had the deposit in hand. Seems to me that the tenant is protected here.

From what you are saying here, it sounds like this is not how it works - but isn't the bank legally obligated by the rental contract, the same as they are for property taxes, etc?

[dingdong]

If you ignore the summons, you will most likely get a default judgement against you and the lender will foreclose.

Are you planning on giving up the house in BK?

How much equity do you have?

As far as the tenants go, just don't cash their rent check, tell them you aren't going to kick them out, put it in writing so they feel comfortable or simply tell them you are lowering their rent to some minimal amount while the house is being foreclosed and write them a new rental agreeent. If you ignore the summons and the bank gets a default judgement and forecloses, they will be kicked out by the bank, and I don't know about Arkansas eviction laws, but it could be rather quick, especially if you ignore the summons and the foreclosure and eviction happen before you file BK.

Call and make an appt w/ a BK attorney for a free consult, see what they say.

Typically foreclosures take 4-8 months before the occupant is forced out in most states, but that can vary.

[mintz]

We intend on letting the properties go back to the bank and include it in our chapter 7. The tenants have always sent money orders. They have never sent a check.

[NoMoreRed]

I would try at all costs to not leave the tenants in a bad position. They are entitled to their refundable deposits I would think, but the best thing to do is go over this whole situation with your attorney.

[mintz]

I do not intend on leaving the tenants out high and dry nor I intend on not refunding them their deposits. That would not be right

They have always paid late and even missed a couple of months that I waived in the past (that hurt my savings account) but we have a home to live in and I do not want them out on the street. The homes are in a small town and I am sure that bank will let them stay their as long as they pay

I am unclear what to do about the summons

[dingdong]

Does the summons have an answer form with affirmative defenses you can claim?

If so, do any of those apply to your situation?


You may be able to ask the court for more time to answer and tell them you are retaining an attorney to help you.

IF you answer the complaint, you will probably buy yourself some time.

I would definitely talk to a BK attorney first.

How much time do you have unitl you are supposed to go to court?

Have you talked to your tenants about possibly buying the property?

Do you have any equity?

[mintz]

The tenants cannot afford the home. We have 30 days to answer. I called an attorney and left a message for him to call me back. Hopefully he will call tomorrow.