Arghh! Now a judgement against us.

[kascls]

We filed Ch 13 (joint) over a year ago. We rented a nice home and moved in August of 2008. In October, we were notified that the landlord filed Ch 7. We checked Pacer and his filing indicated that he was surrendering the house.

Having just spent a lot of money on moving expenses (truck, labor, first/last, utility deposits), and knowing we would likely be moving again, we sought legal advice on what to do about rent payments for November and beyond - until we are forced out. An attorney friend gave us free advice - I guess you get what you pay for. Basically he said, the lease is no longer valid since the landlord filed and is surrendering the house. The CH 7 Trustee actually "owns" the house so the landlord has no legal right to collect rent. He advised us to save the rent money to cover the moving expenses caused by his CH 7 filing. I sent a letter to the owner advising him to use the last month we paid at the beginning of the lease for the November payment.

It is now January and the landlord's bk case is awaiting discharge, 40+ days into the awaiting objections phase. The landlord had us served with papers to collect unpaid rent. Again, our attorney told us not to worry, when the Magistrate Judge finds out that the owner is surrendering the house, he will dismiss the case.

Well, he didn't dismiss the case and has ordered us to pay over $4k and ordered us out of the house in 5 days. I don't know how in the world he came to that amount, that is almost twice the amount of back rent we owe. We are trying to find a place to move it to, but my question has to do with the money.

We have some money that has been saved, basically unpaid rent ftom December and January, but that is not enough to pay for a move and the judgement. I assume if we don't pay, eventually the "owner" will attempt to garnish our wages. Can they do that? Should I get my BK attorney involved? He is not aware of the situation since I didn"t think we needed him involved.

Thanks in advance for any advice.

[chloe0724]

I would get your BK attorney involved. They are the person that was seeming to give you bad information, have them help you deal with this.

[StartingOver08]

Yes, I think it is time to get your real attorney involved.

[rrockinggramma]

well in the first place it was illegal for the landlord to go after you while you were in an active chapter 13. You can sue him for violation of the auto stay that is in place. And I would march right down to the court and show them your chapter 13 paperwork and let the court know that they also violated the auto stay and tell them you want that reversed asap or you will sue them as well. And I would let your "real" attorney know that the auto stay was violated, as well as the trustee that services your case.

The landlord SHOULD have filed a motion to lift the stay to go after you for past due rent. When he didn't he violated the stay in place (as long as chapter 13 is active)

I would be on the courthouse steps at 8:00 am monday with chapter 13 bk paperwork in hand and then my next stop would be my "real" attorney's office.

PS this is post petition debt so you are on the hook for it. But they cannot collect it while you are in an active chapter 13 and you should not have been sued or a judgment placed against you without first lifting the auto stay in place. Was this creditor listed anywhere in your filing as a "executory contract" ?

[Flamingo]

well in the first place it was illegal for the landlord to go after you while you were in an active chapter 13. You can sue him for violation of the auto stay that is in place. And I would march right down to the court and show them your chapter 13 paperwork and let the court know that they also violated the auto stay and tell them you want that reversed asap or you will sue them as well. And I would let your "real" attorney know that the auto stay was violated, as well as the trustee that services your case.

The landlord SHOULD have filed a motion to lift the stay to go after you for past due rent. When he didn't he violated the stay in place (as long as chapter 13 is active)

I would be on the courthouse steps at 8:00 am monday with chapter 13 bk paperwork in hand and then my next stop would be my "real" attorney's office.

PS this is post petition debt so you are on the hook for it. But they cannot collect it while you are in an active chapter 13 and you should not have been sued or a judgment placed against you without first lifting the auto stay in place. Was this creditor listed anywhere in your filing as a "executory contract" ?

It appears the rental took place well after the OP filed Chapter 13; therefore, this bill (landlord) is not included in his BK filing and is a bill to be paid out of his own pocket. The OP needs to contact his BK attorney because if he has to pay anything out of this, it could affect his current Plan payments. The OP also needs to get a copy of the Order to find out why the amount is $4,000 and hopefully his Chapter 13 attorney will help him get out of this situation because the creditor is not part of his Chapter 13 filing from the way his post is worded.

[kascls]

Flamingo is correct, the lease agreement was put in place after confirmation. the $4k judgement was essentially what the landlord wanted, he never really explained how he came up with that figure. We disputed the amount at the hearing but the Judge wasn't interested in getting in to those details. He basically gave the Plaintiff what he wanted.

[justbroke]

well in the first place it was illegal for the landlord to go after you while you were in an active chapter 13. You can sue him for violation of the auto stay that is in place. And I would march right down to the court and show them your chapter 13 paperwork and let the court know that they also violated the auto stay and tell them you want that reversed asap or you will sue them as well. And I would let your "real" attorney know that the auto stay was violated, as well as the trustee that services your case.

Not exactly. Since this is new debt after the Chapter 13 was filed, the landlord is not in violation of the automatic stay imposed by the filing of the Chapter 13.

The landlord SHOULD have filed a motion to lift the stay to go after you for past due rent. When he didn't he violated the stay in place (as long as chapter 13 is active)

Not necessary since this is new debt and a new contract post petition. All post-petition debt and contracts are the duty of the debtor to stay on top of. Only a debt included in or having been acquired prior to the filing of the petition, is subject to the Automatic Stay protection of 11 USC 362.

I would be on the courthouse steps at 8:00 am monday with chapter 13 bk paperwork in hand and then my next stop would be my "real" attorney's office.

Won't work.

Bottom line is, that this person got real bad advise and are now subject to the non-bankruptcy court order. They should contact their BK attorney and see if the new post-petition debt can be in the current Plan.

[BigJohn]

If the landlord is surrendering the house and has filed Chapter 7, I think the landlord's Trustee might be interested in this case.

[justbroke]

If the landlord is surrendering the house and has filed Chapter 7, I think the landlord's Trustee might be interested in this case.

I was thinking that it was the Trustee who brought the suit to collect the $4K for the estate. Otherwise, the Trustee should know

[rrockinggramma]

the trustee would definitely want the 4000 to pay creditors. This could get complicated!

[MJJ3767]

This sure sucks for you. Since your landlord broke the lease, could you turn around and sue him for your original moving expenses, future moving expenses and utility deposits? I most definitely would think the trustee would want to get their hands on this money if you pay. I know in my state you when you file BK, you are asked if you a party to any pending lawsuit. Just curious, when were you served with papers that you were being sued? It seems to me the landlord was trying to get the "timing" right as to when to serve you. (it might back fire on him if that is any consolation)

You really need to talk to a real attorney because depending on what state you are in, once they get a judgement they can garnish your wages and seize your bank account.

[Flamingo]

This sure sucks for you. Since your landlord broke the lease, could you turn around and sue him for your original moving expenses, future moving expenses and utility deposits? I most definitely would think the trustee would want to get their hands on this money if you pay. I know in my state you when you file BK, you are asked if you a party to any pending lawsuit. Just curious, when were you served with papers that you were being sued? It seems to me the landlord was trying to get the "timing" right as to when to serve you. (it might back fire on him if that is any consolation)

You really need to talk to a real attorney because depending on what state you are in, once they get a judgement they can garnish your wages and seize your bank account.

The landlord probably has himself protected as to his having to file BK and there will be verbiage in the rental contract signed by the OP. The signed rental agreement by the OP protects the landlord from being sued if such clauses are present (you can bet they are). This situation is not about the landlord, but about the OP getting stuck after filing a Chapter 13 with a $4,000 judgment which he is responsible for. This is a great posting/situation for anyone in a Chapter 13 to realize that stuff happens after filing that you are responsible for/have to pay for (i.e., car repairs, medical bills, house repairs, in this situation rent...). Hopefully the OP's BK attorney can help him out.

[lrprn]

They should contact their BK attorney and see if the new post-petition debt can be in the current Plan.

Post-filing debt cannot be added into a Ch 13 plan, but if the financial changes are long-lasting/permanent, they can be accommodated by filing a modified plan.

However, in this case, if the filer has to pay the $4000, it may not be considered a long-term financial impact. Depending on the amount of the current monthly payment, the trustee might allow a few missed payments or reduced payments for a period of time and lengthen out the modifiedplan accordingly to pay the $4000 off, then return to the confirmed monthly Ch 13 payment.

Sure wish you contacted your Ch 13 lawyer from the start, but can't turn back the clock. As others have already recommended, call your lawyer immediately and work with him/her to resolve this unfortunate situation.

[kascls]

If I do not pay the $4k, I suppose the landlord will go back to the Magistrate Court to request garnishment. Since my wages are already garnished for the Ch. 13 repayment plan, will the garnishment be put on-hold until I am discharged in 3.5 years?

We pay around $1300/month to the plan.

[justbroke]

If I do not pay the $4k, I suppose the landlord will go back to the Magistrate Court to request garnishment. Since my wages are already garnished for the Ch. 13 repayment plan, will the garnishment be put on-hold until I am discharged in 3.5 years?

Yes. A Chapter 13 "wage deduction order" (not a garnishment) supersedes all wage deductions and garnishments except for any support orders (like child or spousal support).