Landlord (rent) question - before and after a Chapter 7

[gman]

* I am planning on filing Oct 1 when I pass the Means Test.

* I am current on my rent payments and plan on staying in my rental home.

* I am unemployed - so my concern is the Trustee allowing me to stay in the rental home (forcing me to break the lease - when I want to continue it.)

* If push comes to shove, my family will likely kick in to make sure I can stay current post-bankruptcy. Hopefully I will find a job soon and this part will be a non-issue.

Questions:

* What should I expect from the bankruptcy court in relation to this kind of scenario? (Note: I know on my car I can approach my credit union about a "drive-through"...is there a similar function for rental property?)

* Will my landlord be notified of my bankruptcy - and if so - when (in relation to my filing date of Oct 1)?

[Pandora]

* I am unemployed - so my concern is the Trustee allowing me to stay in the rental home (forcing me to break the lease - when I want to continue it.)

* Will my landlord be notified of my bankruptcy - and if so - when (in relation to my filing date of Oct 1)?

The trustee shouldnt be concerned about your rental unless its something you cannot afford or its extremely expensive compared to other rentals in your area, but even then - its rare a trustee questions rent and/or mortgage payments unless you cant afford it.

Your landlord may or may not be notified, it will depend on if they're a creditor or not, however it also may vary in your region/district.

[gman]

The trustee shouldnt be concerned about your rental unless its something you cannot afford...

Seeing that I am unemployed and collecting only $1,000/mo in unemployment income - I would think that almost any housing is not "affordable".

With this being the case - what should I expect?

[Pandora]

If you're insolvent and no means of supporting yourself after you file other than UI... - I'd wait to file until you have a job secured as its possible you can rack up more debt between now and finding a job. What happens if your UI runs out and you're locked into your lease? Is it month to month or are you on a yearly contract? If month to month - then you can get out of it with 30 days notice - if on a yearly lease, then you could be held responsible for the remainder of the lease if you break it.

how many weeks do you have left to collect?


I'm not really certain how it would work if you have no money - its sort of a unique situation you're in. I have a call into our attorney who is supposed to call back today - I can run it by him or his paralegal if they'd care to answer it, if that helps you. ??

[gman]

Assume my family has me covered if I cannot find a job and will pay my rent for me after bankruptcy. Again - this is not my plan - but I know they will if it comes to that.

Waiting to file until AFTER I find a job is not an option for me.

-----------------------------------------

My main question is what to expect from the Court when I ask them about staying in my current property even without a job.

Can the court somehow force me to break my lease? This is the same situation I have with my car. I've been given advice here that I can contact my credit union and ask for a "drive through" on the car loan.

There must be something similar for renters!?!?!?!

Any advice????

[gman]

What happens if your UI runs out and you're locked into your lease?

My family will pay for my lease if this happens.

Is it month to month or are you on a yearly contract? If month to month - then you can get out of it with 30 days notice - if on a yearly lease, then you could be held responsible for the remainder of the lease if you break it.

It is a 2 year lease that has 12 months remaining. If either party breaks the lease early - we are to pay the other party 2 months rent. Plus - I'd be looking at moving expenses...so I'd be trading one problem for another if I broke it after bankruptcy. I am very likely to stay here for the next 12 months - and it is actually my preference to do so.

how many weeks do you have left to collect?

Assuming you are asking how many weeks of Unemployment Income. I have only been collecting for 2 months so far.

I'm not really certain how it would work if you have no money - its sort of a unique situation you're in. I have a call into our attorney who is supposed to call back today - I can run it by him or his paralegal if they'd care to answer it, if that helps you. ??

Yes - that would be awesome. Thanks!

[Pandora]

Yes - that would be awesome. Thanks!

I'll try to squeak it in at the end of my concerns - hopefully he'll answer it, but...you never know LOL. Will keep you posted here if I can get him to answer it.

In the meantime, I'm sure there are others on here that have been in your situation that will chime in.

[kartoons19]

I'm a renter who just recently was laid off. I'm not concerned about the trustee breaking my lease. I don't remember reading on this forum that anyone has ever had a trustee break their lease, so I would think it is unlikely that would happen. My landlord was not notified of the filing, even though I am in a lease. I think this policy varies by district. Good luck to you.

[empowered]

I agree with kartoons19 and am a renter who has been through 13 with a lease in place and am now doing a 7 in a new district and rental.

I wouldn't wait to file until you get a job if you pass the means test now and are under the median income. If the totality of your situation changes and you have much disposable income, your option to do a Chapter 7 could be in jeopardy. Also, if you ended up filing Chapter 7 with a broken lease there's also the possibility that any penalty amount owing under a legal lease would be included in the discharge of your debts anyway. I would think it would be in the interests of the landlord to remain your landlord instead of a creditor.

If you're fearful about how bankruptcy could affect your legal standing as a tenant, you may also want to check into landlord-tenant law in your area. That lease should also protect you and so should any landlord-tenant codes that govern how legal leases may be written in your area.

[gman]

If you're fearful about how bankruptcy could affect your legal standing as a tenant, you may also want to check into landlord-tenant law in your area. That lease should also protect you and so should any landlord-tenant codes that govern how legal leases may be written in your area.

This is indeed my concern.

The advice to check on landord/tenant codes is great advice. Thanks!

Still wondering if a Trustee has the right to cancel a rental lease - especially when I want to keep it in place.

Any ideas???

[ccsjoe]

gman,

I'm in the same boat. In my district, anyone listed on the schedules receives notice, so my attorney and I are contemplating leaving the actual lease off of Schedule G and just "imply" it is a month by month lease,thus avoiding notification of landlord. Of course, if questioned by the trustee, we'll say ooops, forgot to include that and just add it to the schedule. If that happens, then I'll have to call our landlord and have a talk with him.

Some standard leases used to have language built into them that made a BK filing a breach. Most of those no longer apply due to revised state civil codes. Empowered is right that you should check your state's civil code regarding landlord/tenant laws, specifically tenant bankruptcy. Most states have their codes available electronically so you may be able to perform a key word search.

[empowered]

Hi gman.

Because I'm a renter big on renters' rights, I was curious enough to begin to research this further. A google of "can a bankruptcy trustee vacate a tenant lease" came up with a few interesting things so far. The first article is the most generally relevant. If I find something better, I'll post it. I was also thinking of googling something like: "will I be evicted if I file bankruptcy".

I also recall reading a post from someone in this forum that said that his or her own lease agreement contained a clause that would nullify the lease if the forum member filed bankruptcy, so in addition to local landlord-tenant law (which sometimes throws out lease clauses that controvert local codes) you should review your lease.

Some locales also have free tenants' rights organizations that can advise you on local codes -- I've taken advantage of such community resources multiple times in the past and recommend them.

The thought that a tenant who pays rent on time but declares bankruptcy is automatically evicted is really troubling. I do understand that if a person is renting an unusually expensive place it's reasonable to expect them to downsize, but the general application of a law like this would increase the likelihood of homelessness in a society that increasingly believes that only people with good credit deserve homes. The bankrupt have to live somewhere and, for most of us, the rent is the first thing paid.

About how the new bankruptcy law affects tenants:
(Note especially the last paragraph of this article that describes the latitude and likely course of action of a trustee under the new law)

http://realestate.findlaw.com/landlord/landlord-eviction/tenant-bankruptcy-and-eviction.html

An overview, apparently for landlords, with specificity to California law. See the last paragraph, Tenant Bankruptcy:

http://www.landlord.com/lawresoverview.htm#9.%20Tenant%20Bankruptcy

[ccsjoe]

Another great resource if you are in CA is www.tenantstogether.org . Because of what we went through a few months ago I had to delve into landlord/tenant law, evictions, foreclosures, etc. If you're not in CA, I'm sure they can recomend a sister group to help you

[empowered]

Here's the actual Nolo article. It sounds like it comes down to the inclinations of your landlord, if he or she is informed of your filing, and the inclinations of the trustee. As kartoons19 indicated, the likelihood of anything that endangers the position of a tenant who is not behind on the rent seems very small -- if members of this forum don't really hear of this happening in a day-to-day situation, it may not be a practical concern for most, though we all worry about a lot when it comes to these topics. Still, researching your legal position with respect to your locale and your lease is always a good thing, in my own non-legal opinion.

http://www.nolo.com/legal-encycloped...cle-29689.html

This section seems the most critical here:

Tenant Is Not Behind On Rent or Violating Lease

Filing for bankruptcy can affect a tenancy even if the tenant is not behind in the rent or otherwise in violation of the lease. After a tenant files for bankruptcy, the "bankruptcy trustee" (the person appointed by the bankruptcy court to oversee the case) must decide whether to carry on with or terminate the lease or rental agreement. In most situations, the trustee will let the tenant keep the lease, since it wouldn't benefit the tenant's creditors to force the tenant to incur the expense of finding a new home. However, if the tenant is paying an outlandish rent and there are plenty of modest rentals available, the bankruptcy trustee may terminate the lease and require the tenant to find a new home.

You do have the right to ask the bankruptcy court to demand that the tenant show proof of his ability to pay future rent, even if the tenant has never been late with the rent. If the tenant later becomes unable to pay the rent, you can ask the bankruptcy court to lift the automatic stay so that you can terminate the lease and, if necessary, evict the tenant.

[kartoons19]

Great information Empowered (I like your name by the way ;^) ). I keep hearing that BK is supposed to be a fresh start, not a process for stripping us of all of our possessions and leaving us out in the streets. As I mentioned before, I think if this was an issue someone would have posted their experience on the forum. I don't remember reading anything about this and believe me, I have done my research! I would follow up with the information that Empowered gave and said that if your rent is over the IRS allowance then it may be an issue, but other than that, I don't think it is a problem.

By the way, my lease was not listed in the contract section. I put it there on my paperwork, but my attorney left it off. She's been doing this 20 years, so I assume she knows what she is doing. I did tell her I didn't want the landlord notified if at all possible. I guess I will find out on Thursday if this is an issue, but again I'm not expecting it to be.