Tenant Files Bankruptcy

What happens if my tenant files bankruptcy?

Back Rent

If the tenant owed back rent and filed for chapter 7 bankruptcy, that debt is now likely discharged. This means that you will never be able to collect the rent that was owed to you at the time the tenant filed for bankruptcy. The tenant can voluntarily pay you, but you can not attempt to collect that past due rent while the automatic stay is in effect or after the debt is discharged.  Such attempts would be either a stay or discharge violation.

Eviction

If you were in the process of evicting your tenant when they filed for bankruptcy, that eviction action is now likely stayed. This means that you will have to make a “lift stay” motion and have it granted by a Bankruptcy Court Judge in order to continue with the eviction in Landlord-Tenant court. However, under certain specific circumstances you will be allowed to continue with the eviction despite your tenant having filed for bankruptcy.

Long Island Landlord Tenant Attorney

As always, the  Law Firm of Vaughn, Weber & Prakope, PLLC is here to assist you.  Call (516) 858-2620 to arrange a FREE consultation with a Landlord Tenant attorney!

Please visit our Bankruptcy category to learn more about filing chapter 7 or 13 bankruptcy.