IF THE PROPERTY MANAGER OR OWNER IS NOTIFIED THAT ONE OR MORE TENANTS HAVE FILED BANKRUPTCY, ACTION MUST BE TAKEN

 

1.  A Tenant who files a Bankruptcy is protected under State and Federal law.

 

2.  If a Tenant claims to have filed a Bankruptcy, this must be verified if the Tenant has not provided proof. Our office can verify this for you.  Often the Tenant has not actually filed a Bankruptcy.

  

3.  If it is verified that a Tenant has filed a Bankruptcy, the Tenant cannot be subject to any rent demand actions and no eviction can be filed.

 

4.  The Tenant can no longer be given any demand for payment of any sums.

 

5.  If the Tenant files a Bankruptcy during an eviction, the eviction action will stop at the point it is at due to the Bankruptcy.

 

6.  In order to attempt to demand any rent, file an eviction, OR finish up an eviction action once Bankruptcy has been filed, legal papers must be filed in Federal Bankruptcy Court asking the court to allow the Owner or the Property Manager to proceed.

 

7.  Our firm will file a MOTION TO LIFT THE STAY OF BANKRUPTCY with the Federal Bankruptcy court.

 

8.  A “STAY” MEANS A “STOP”.  Rent demands and evictions are temporarily “STOPPED” by the Tenant filing Bankruptcy.

 

9.   Generally the Bankruptcy court will allow the rent demand or the eviction action to proceed once the Bankruptcy court reviews the Motion to Lift Stay of Bankruptcy and often a short court hearing is required where the Bankruptcy court will usually grant our Motion.

 

10.  The Owner and Property Manager should expect additional expenses and a delay of one to two months.

 

11.  Often, a Tenant who has filed a Bankruptcy or has claimed to have filed a Bankruptcy will continue to pay the rent and if this occurs, no action needs to be taken other than verification if the Tenant has indeed filed a Bankruptcy.  It is permissible to accept rent after a Tenant has filed Bankruptcy but legal advice is recommended as the Bankruptcy court has the ability to demand back the rent that the Tenant has paid and does so in rare circumstances.

 

IF A TENANT FILES A BANKRUPTCY OR CLAIMS TO HAVE FILED A BANKRUPTCY, THE PROPERTY MANAGER MUST IMMEDIATELY STOP AND TAKE THIS SERIOUSLY.

 

IF THE PROPERTY MANAGERS DEMANDS RENT, FILES AN EVICTION OR CONTINUES AN EVICTION IN PROGRESS KNOWING THAT THE TENANT HAS FILED BANKRUPTCY, THE PROPERTY MANAGER COULD BE SUBJECT TO SERIOUS AND EXPENSIVE SANCTIONS BY THE FEDERAL COURT.

 

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