Tenant bankruptcy (by JamesD [CO]) Apr 20, 2009 3:52 PM|
Tenant bankruptcy (by K [MN]) Apr 20, 2009 4:00 PM
Tenant bankruptcy (by in [IN]) Apr 20, 2009 4:22 PM
Tenant bankruptcy (by Susan [CO]) Apr 20, 2009 4:57 PM
Tenant bankruptcy (by Bartleby [TX]) Apr 20, 2009 5:02 PM
Tenant bankruptcy (by Getty [GA]) Apr 21, 2009 4:51 AM
Tenant bankruptcy (by JamesD [CO]) Apr 21, 2009 9:24 AM
Tenant bankruptcy (by Virden [OH]) Apr 21, 2009 3:08 PM
Tenant bankruptcy (by Mike45 [NV]) Apr 21, 2009 4:10 PM
Tenant bankruptcy (by sdf [SD]) Apr 21, 2009 4:28 PM
Tenant bankruptcy (by JamesD [CO]) Apr 21, 2009 8:50 PM
Tenant bankruptcy (by JamesD [CO]) Posted on: Apr 20, 2009 3:52 PM
We are screening candidates for our 3BD condo. We have a candidate who is going through a divorce. She admitted that in her situation she's likely to file for bankruptcy in the near future to protect herself following divorce proceedings.
If she DOES declare bankruptcy, does that potentially obsolve her from the obligations stated in our lease?! Not sure of the extent the bankruptcy laws and what effect they may have on a lease.
Please comment -
Tenant bankruptcy (by K [MN]) Posted on: Apr 20, 2009 4:00 PM
As long as someone is paying rent it doesn't matter if they declare bankruptcy. The problem is when they owe you money and they declare bankruptcy. --209.68.xxx.xxx
Tenant bankruptcy (by in [IN]) Posted on: Apr 20, 2009 4:22 PM
Once she files, she can not file again for 7 years, I believe.
People often find new wealth after bankruptcy, no bills.... --68.58.xx.xx
Tenant bankruptcy (by Susan [CO]) Posted on: Apr 20, 2009 4:57 PM
Well, I am not an attorney, but I did attend a Colorado collections seminar and the instructor there indicated that if a tenant files bankruptcy while in a rental unit and they list the landlord as a creditor, they have some protection that complicates a matter of eviction if they do not pay. The instructor said it was dependent upon jurisdiction if the judge issues a stay on the eviction or not because you are dealing with two courts ... a bankruptcy court and a county court.
That information made it easy for me to set a policy not to go there! --209.181.xx.xx
Tenant bankruptcy (by Bartleby [TX]) Posted on: Apr 20, 2009 5:02 PM
If she declares bankruptcy and she is still living in your house, you had better hope she does not get behind. You can not simply file eviction. Prepare to spend $2,000 to 3,000 for and attorney to set aside the automatic stay. Also prepare for two or three months of not collecting rent. Any actions you take have to go through the bankruptcy trustee. Good luck with this one. I have been through it before. --76.236.xxx.xx
Tenant bankruptcy (by Getty [GA]) Posted on: Apr 21, 2009 4:51 AM
In a bankruptcy case, the tenant will report her unexpired lease with you to the bankruptcy court on her statement of financial affairs. She'll have the option of abandoning the lease or maintaining the lease.
Everything is fine and dandy as long as she pays. If she decides not to pay her rent, you can't just walk into summary court and evict her - you have to petition the court to lift the automatic stay pertaining to the unexpired lease. If you don't know how to do this yourself, it could cost a couple of hundred dollars to get it done. It won't cost you thousands in legal fees, but if she's an active Chapter 7 you could be out thousands in rent by the time you finally get her out.
The good news is that a Chapter 7 bankruptcy is fairly cut and dry and she should be through the whole process within 90-120 days unless she commits fraud, her creditors object, or she has enough income to be forced into a Chapter 13. If she lapses into a Chapter 13, you don't want her as she'll be in repayment status for three to five years and all of your payments will come from a grumpy old trustee who really doesn't care whether you get paid on time or not.
If it were me, knowing what I know of bankruptcy, the threat of a tenant or potential tenant to file bankruptcy is enough to make me want to end everything right there. You'll probably want to do yourself a favor and stay away from this one. --72.147.xx.xx
Tenant bankruptcy (by JamesD [CO]) Posted on: Apr 21, 2009 9:24 AM
So the problem is really trying to collect rent IF she should get behind on payments - understand... what if we convince her to have her lease co-signed by someone else (an emergency contact). Does that make things better!? --98.245.xx.xx
Tenant bankruptcy (by Virden [OH]) Posted on: Apr 21, 2009 3:08 PM
Don't let her soon to be ex husband do it, advise her to have a friend with a house sign the paperwork, then you can place a lien after the judgment. --76.241.xxx.xx
Tenant bankruptcy (by Mike45 [NV]) Posted on: Apr 21, 2009 4:10 PM
As stated above, when she files BK, she has the right to reject the on-going lease or to keep it. but if she just signed on with you, that is not a major concern. After all, she doesn't want to move again right away, right?
There are three other scenarios.
(1) She is paying rent on time, and continues to do so. BK is not an issue to you.
(2) She is not paying rent when she files BK, and you are either evicting or about to. The filing of BK immediately stays your eviction process. You need to go into BK court and get permission to evict. Permission will be granted, it will just be a slight delay in your eviction. Only real problem is that if you don't know how to do it, it will cost a few hundred, and a one week delay is money you are not making. You won't get the rent that was due before the BK was filed, but you will recover possession.
(3) She is paying rent, files BK and then stops paying rent. Similar to #2 above, except that BK judge might really ream her and get you paid without the need for the eviction. Post-BK living expenses are considered "administrative expenses" and have priority over the creditors that were owed money at the time of the BK filing. You will recover all of the post-BK rent.
Tenant bankruptcy (by sdf [SD]) Posted on: Apr 21, 2009 4:28 PM
She must not qualify if her bills (including any mortgage) is added to the cost of running another household (in your rental). She's told you she will have financial difficulties in the near future. This is a no-win situation that will have you on nerve's end waiting to know IF she will file bankrupcy and IF you will somehow be drawn into the drama of bankrupcy court.
You'll dodge a bullet by letting this one go to another landlord. You've been forewarned by the girl. How much money are you willing to risk on this person? --70.189.xx.xxx
Tenant bankruptcy (by JamesD [CO]) Posted on: Apr 21, 2009 8:50 PM
Her stated income (Net) is $2766 and monthly rent is to be $1050. I realize the typical qualification ratio is that income should be at least 3 x rent, but is that Net income or Gross income?! Plz clarify that for me. --98.245.xx.xx