rental deposits and Chapter 7

[whoisonfirst]

What is the name of your state? OR

This is regarding Chapter 7 in Oregon.

Sorry for all these questions! The more questions I ask, the more I seem to have. These forums have been wonderful. Thank you in advance.

I am wondering how the trustee will handle our rental deposit. We have a refundable deposit coming to us (assuming no damage to our apartment, etc.) from our current apartment. I am assuming the trustee will take this check - fine with me. That is only fair.

What worries me is the deposit on our new apartment - the one we just paid in order to sign a lease. The new apartment has a refundable deposit amount of $225 plus an extra $470 we were charged for having a bad credit score. If the trustee were to seize this, we would lose our apartment and be homeless.

The reason I ask is because the questionnaires I have seen include a statement of rental deposits. Do the trustees seize these deposits even if it will render you homeless, without an apartment? Or are they mostly interested in the ones that are literally on their way at the time of filing (such as the check from our current apartment, which the trustee is certainly welcome to take)?

Thanks in advance. And let me know if I am not making sense.

 

[HomeGuru]

What is the name of your state? OR

This is regarding Chapter 7 in Oregon.

Sorry for all these questions! The more questions I ask, the more I seem to have. These forums have been wonderful. Thank you in advance.

I am wondering how the trustee will handle our rental deposit. We have a refundable deposit coming to us (assuming no damage to our apartment, etc.) from our current apartment. I am assuming the trustee will take this check - fine with me. That is only fair.

What worries me is the deposit on our new apartment - the one we just paid in order to sign a lease. The new apartment has a refundable deposit amount of $225 plus an extra $470 we were charged for having a bad credit score. If the trustee were to seize this, we would lose our apartment and be homeless.

The reason I ask is because the questionnaires I have seen include a statement of rental deposits. Do the trustees seize these deposits even if it will render you homeless, without an apartment? Or are they mostly interested in the ones that are literally on their way at the time of filing (such as the check from our current apartment, which the trustee is certainly welcome to take)?

Thanks in advance. And let me know if I am not making sense.

**A: the Trustee will not seize the deposit on your current rental.

 

[AttorneyOney]

Rental and other deposits are assets of the estate unless they are exempt for some reason. Furthermore, the trustee will end up technically "rejecting" unexpired leases, and that (technically) is considered a breach of the lease that would (theoretically) permit the landlord to evict you.

Before you get too worried about this, figure up your exemptions. There is probably some way to cover the deposit so that it would not become part of your estate and subject to seizure by the trustee. If you don't owe back rent to the new landlord at the time you file, you won't have to list him as a creditor, and he won't necessarily ever know you've filed. Even if he did know, it's unlikely that he would want to do anything if you're current on the rent.

I realize you want certainty before you make this potentially big leap into the unknown. Your own attorney should be able to explain these issues to you better than anyone on the Internet can.

 

[whoisonfirst]

so would this be the kind of thing that makes Chapter 13 better?

Oregon/Chapter 7

So would this issue with rental deposits and the possibility of eviction make Chapter 13 a better option? I am not sure whether we have enough disposable income to cover our debts (or the necessary percentage) under a Chapter 13 plan. We visited a lawyer for a consultation, and he seemed to think Chapter 13 would be a mistake for us.)

 

[AttorneyOney]

I didn't say that, and I didn't mean to imply it. Please see an attorney and let him do the worrying for you. If you must file without an attorney, read up on the exemption laws for Oregon so you can see exactly what position you'll be in.

 

[whoisonfirst]

thanks again!

Thanks again for all your help. You have been amazing! I was just thinking out loud about the Chapter 13. This forum has given me lots of ideas for what to discuss with the lawyer ...