Landlord Bankruptcy

[gobigblue98]

We are six months into a 3-year lease agreement on a house and our landlord has notified us that he has filed for bankruptcy. We assume that his lender will take possession of the property. What will be the outcome of this for us as the tenant? Will the lender or lien holder be required to honor the lease or do we need to contact them in an attempt to make special arrangements to remain in the house for the complete term? Furthermore, the landlord has stated that we should no longer pay rent to him. To who should the rent be paid and is there even anyone out there expecting our payment?

 

[Gail_in_Georgia]

Nothing will really happen until the house goes into foreclosure. At that time the new owner MAY honor your lease (actually having you sign another one with them) or may ask you to leave since your lease will no longer be valid.

Many real estate investors are picking up foreclosure homes with tenants already in place and keeping them as they don't have to go through the hassle of finding new tenants.

Typicallly once bankruptcy is filed, a landlord no longer collects rent from tenants and unless you are contacted by the lienholder, no rent is paid during this time. It's a strange and stressful situation but it does allow you some time to set some money aside should you need to move in the near future. This is a good thing since it is often difficult to get ones security deposit back in a situation like this.

Ask your landlord for the name of his attorney handling the bankruptcy to confirm what you need to do as laws can vary a bit from state to state.

Gail

 

[gobigblue98]

Thank you for your thoughtful reply!

Do you know how long the foreclosure process typically takes and when might we expect some sort of notice? According to the landlord, he filed his paperwork just last week.

 

[jacksgal]

There are many vaiiables that could take place. At this point there is no foreclosure on a BK filing far as you know. Therefore the witholding of rent may not be lawful. You need to talk to a Lawyer or someone in the know on your next move. You might also discuss things with Landlord himself. Can you leave now (amend lease) is your deposit safe? Can you stop paying rent? So many questions. The good news is that your Landlord was kind enough to give you notice of pending events many tenants in these tough times find out after home is foreclosed on.

 

[gobigblue98]

I agree, there are many questions that we have at this time. First is the paying of January rent. The landlord told us last week that he would give us someone to contact to discuss our next move, but we have not yet received this information. I sent him an e-mail letting him know that, per his request, we would not submit a rent check to him this month and again asked that he send us the name and contact information of someone that could let us know who to pay. He has not responded, but I think that our notice to him should cover us for now.

How can we determine if he has filed his bankruptcy paperwork? I'm not familiar with the BK filing that you mentioned. Is this public information? I'll be attempting to contact the landlord today to get his attorney's name - maybe he'll be forthcoming with this information.

 

[jacksgal]

You missed something here! His filing for BK does not remove your ogligation to pay rent. Until house is foreclosed he still owns it! Not paying rent could result in eviction making renting new place near impossible. Talk to Landlord about rent even ask about not paying rent to save money for move. I suspect your deposit will be hard to get as he apparently has no money. Do not avoid paying rent unless you are told by a Lawyer or your Landlord its ok and get that ok in writing!

 

[doubletrouble]

Bankruptcy filings are a matter of public record and you can track the docket of your landlord's petition online with a PACER account. Technically, the bankruptcy trustee now "owns" your landlord's property and will continue to until it's "abandoned" by the trustee or the bankruptcy itself is either dismissed or discharged. In the meantime, the trustee will determine (with the court's approval) the foreclosure timetable if there is to be one. I'm not an attorney so I encourage you to confirm/consult with someone who is.

 

[johnsteed]

Bankruptcy is the condition affirmed by the court of law that somebody or an organization has been unable to clear its debt. This may happen in a court of law when a creditor files a petition towards the debtor who has been not able to pay the required monetary funds. Several cases have been recorded and mandated in the past.

There are several filing of illegal act in financial courts to day. The most common filing is Chapter 7 bankruptcy law which includes assets conversion into money. It has been commentary to over 35% of customer filling. An appointed trustee makes sales of all concerned person belongings and share out takings from this auction to suitable creditor.