We are renting - owner just filed chapter 7

[kascls]

Life is complicated enough, now this. My wife and I are in year 2 of a 5 year Chapter 13 payment plan. We surrendered our house and moved in to a rental house. We signed a two year lease with a private owner (husband and wife) whose primary residence is out of state. The house was going to be their retirement home but his business was hurting so they decided to lease it. They really wanted us to buy it but we are not in a position to buy since we are in BK.

We've only been in the house a few moths, we haven't even unpacked all of the boxes yet. We just received a letter from the BK Court that the owner has filed a chapter 7. I'm assuming they sent us a letter to notify us since we have a lease with them. Now what?

Do we continue making rent payments per our lease agreement? Do we contact their trustee directly? Should I attempt to find out who the mortgage is with in order to negotiate the continuation of the lease with them?

We paid 1st and last month rent when we signed the lease.

If there was a way, and I can't imagine how, we would like to purchase the house. I make a 6 figure salary and my wife also makes a great salary - the reason we filed had more to do with a pending lawsuit then us not paying our bills.

One other observation - on our short neighborhood street there are probably 6 houses sitting empty - I think most are bank owned, I can't imagine they want another one.

[HHM]

Hmm, difficult situation.

Normally, I recommend people to stop paying rent. The owner has bigger problems than to evict you. You should probably log into a pacer and pull a copy of the petition so you can see what the debtor's intentions are with the house and your lease.

If the owner is willing to work with you, it could be worthwhile to contact the current mortgage lender and see what they can do. If you have been in a chapter 13 for two years you can qualify for a loan (the only questions is the willingness of the lender).

If the owner is going to surrender the house, you can stay in there until someone actually goes to the trouble to evict you, which could be many many months. If the owner isn't going to evict you, then you have the entire foreclosure process and BK to live in the house, and the current mortgage lender is probably not going to want to kick you out.

Basically, stop paying rent and see what happens.

[kascls]

Thank you for the reply. If you don't mind, I have a couple of follow-up questions. Will I be able to find/view the petition even though the home owner is the one filing...will I have access to their paperwork? Also, since they are filing BK, doesn't that stop the foreclosure process (stay)? If that is the case, does the trustee take "ownership" of the house? Lots of questions, I know. I was about to send a rent check for November, sounds like I will hold off unitl I figure out what their intentions are with regards to the house.

BTW, the house we are renting is in Georgia, his primary residency is Florida...I suppose that is just a complicating factor.