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Rental Properties
charset="windows-1251"
The difference between rental income and earned income is that one derives
from property of the estate, i.e. the estate owns the property. The other
derives from personal services and is not property of the estate IN A
CHAPTER 7 CASE. See 541(a)(6).
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
t_mannis
Sent: Thursday, April 23, 2009 8:13 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Re: Rental Properties
He does this often, he is the only one I have seen do it, and I have often
wondered the same thing. Even if you take the position that this income is
an asset, how would it not be an asset acquired POST-petition? And if this
income is reachable, exactly what income isn't reachable? The debtor has an
expectation of receiving his paycheck too, how is that different? He hasn't
earned it yet? Neither has he "earned" the future rental income yet.... What
are we missing? Thank you David for bringing this up.
Todd Mannis, Esq.
In cdcbaa@yahoogroups. com, David Follin
wrote:
>
>
> I observed a 341 Hearing where David Farmer, told the attorney that his
client, who has several rentals, must turn over all rental income from date
of filing, even though the rents were used to pay the mortgages and the
banks secured all rents in the Trust Deed. I have never seen this before.
Has anyone had this experience and is the Trustee acting properly?
> David Follin
>
charset="windows-1251"
Message
The difference between
rental income and earned income is that one derives from property of the estate,
i.e. the estate owns the property. The other derives from personal
services and is not property of the estate IN A CHAPTER 7 CASE. See
541(a)(6).
David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.
The postpetition income exclusion of 541(a)(6) applies to personal services income in a chapter 7. Rent, issues and profits from property of the estate belong to the estate if earned prepetition or postpetition.
dennis
Subject: [cdcbaa] Re: Rental Properties
To: cdcbaa@yahoogroups.com
Date: Thursday, April 23, 2009, 8:13 AM
He does this often, he is the only one I have seen do it, and I have often wondered the same thing. Even if you take the position that this income is an asset, how would it not be an asset acquired POST-petition? And if this income is reachable, exactly what income isn't reachable? The debtor has an expectation of receiving his paycheck too, how is that different? He hasn't earned it yet? Neither has he "earned" the future rental income yet.... What are we missing? Thank you David for bringing this up.
Todd Mannis, Esq.
In cdcbaa@yahoogroups. com, David Follin wrote:
>
>
> I observed a 341 Hearing where David Farmer, told the attorney that his client, who has several rentals, must turn over all rental income from date of filing, even though the rents were used to pay the mortgages and the banks secured all rents in the Trust Deed. I have never seen this before. Has anyone had this experience and is the Trustee acting properly?
> David Follin
>
The postpetition income exclusion of 541(a)(6) applies to personal services income in a chapter 7. Rent, issues and profits from property of the estate belong to the estate if earned prepetition or postpetition.dennis--- On Thu, 4/23/09, t_mannis <toddlaw@dslextreme.com> wrote:
The post was migrated from Yahoo.
We typically inform our clients that this is a possibility. However, to date, I have not come accross one trustee that has been interested. Even when we've had cases where clients were surrendering many rental properties from which rents were being collected, the trustees have not wanted the post-petition rent b/c of the possible tax ramifications to the estate.
Raj T. Wadhwani
Wadhwani Law Firm, APLC
15233 Ventura Blvd., Suite 1160
Sherman Oaks, CA 91403
Phone: (818) 784-0500
Fax: (818) 784-0508
raj@wadhwanilaw.com
>
> David:
>
> Income from estate property belongs to the trustee. The trustee can take it. I was hired as an expert to testify in a federal prosecution of some forclosure consultants. They got off of the charges relating to bankruptcy crimes, but got 5 years each for collecting rentswhich belonged to a federally insured institution under an assignments of rents clause, and pocketing them. Most trustee's don't know they can get in trouble. The quasi-judicial immunity they get when their final reports are approved lets them break the rules occasionally.
>
> dennis
>
> --- On Wed, 4/22/09, David Follin wrote:
>
> Subject: [cdcbaa] Rental Properties
> To: cdcbaa@yahoogroups.com
> Date: Wednesday, April 22, 2009, 9:16 AM
>
>
>
>
>
>
>
>
>
> I observed a 341 Hearing where David Farmer, told the attorney that his client, who has several rentals, must turn over all rental income from date of filing, even though the rents were used to pay the mortgages and the banks secured all rents in the Trust Deed. I have never seen this before. Has anyone had this experience and is the Trustee acting properly?
> David Follin
>
The post was migrated from Yahoo.
Not sure, but this may expose the estate to a claim for rent skimming.
Someone may want to investigate this legal issue and then report back to the
USTee or file something with the Court if I am correct.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
David Follin
Sent: Wednesday, April 22, 2009 9:17 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Rental Properties
I observed a 341 Hearing where David Farmer, told the attorney that his
client, who has several rentals, must turn over all rental income from date
of filing, even though the rents were used to pay the mortgages and the
banks secured all rents in the Trust Deed. I have never seen this before.
Has anyone had this experience and is the Trustee acting properly?
David Follin
Message
Not sure, but this may
expose the estate to a claim for rent skimming. Someone may want to
investigate this legal issue and then report back to the USTee or file something
with the Court if I am correct.
David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.
charset="US-ASCII"
I understand that the post-petition rents are the property of the estate.
Does this mean that people with rental properties are not allowed to use
said rents to pay the post-petition mortgages in a Chapter 7? This would
result in most people losing rental properties in a seven, even if they
could stay current with the rents.
_____
The post was migrated from Yahoo.
David:
Income from estate property belongs to the trustee. The trustee can take it. I was hired as an expert to testify in a federal prosecution of some forclosure consultants. They got off of the charges relating to bankruptcy crimes, but got 5 years each for collecting rentswhich belonged to a federally insured institution under an assignments of rents clause, and pocketing them. Most trustee's don't know they can get in trouble. The quasi-judicial immunity they get when their final reports are approved lets them break the rules occasionally.
dennis
The post was migrated from Yahoo.
He does this often, he is the only one I have seen do it, and I have often wondered the same thing. Even if you take the position that this income is an asset, how would it not be an asset acquired POST-petition? And if this income is reachable, exactly what income isn't reachable? The debtor has an expectation of receiving his paycheck too, how is that different? He hasn't earned it yet? Neither has he "earned" the future rental income yet.... What are we missing? Thank you David for bringing this up.
Todd Mannis, Esq.
In cdcbaa@yahoogroups.com, David Follin wrote:
>
>
> I observed a 341 Hearing where David Farmer, told the attorney that his client, who has several rentals, must turn over all rental income from date of filing, even though the rents were used to pay the mortgages and the banks secured all rents in the Trust Deed. I have never seen this before. Has anyone had this experience and is the Trustee acting properly?
> David Follin
>
The post was migrated from Yahoo.
I observed a 341 Hearing where David Farmer, told the attorney that his client, who has several rentals, must turn over all rental income from date of filing, even though the rents were used to pay the mortgages and the banks secured all rents in the Trust Deed. I have never seen this before. Has anyone had this experience and is the Trustee acting properly?
David Follin
The post was migrated from Yahoo.