BK filing and Landlord notices

[ccsjoe]

For anyone here who is a renter considering filing BK:

If you are renting and have a lease, technically you need to list your lease on Schedule G and on Part 2 of the Statement of Intent. This will cause your landlord to be notified of your bankruptcy like any other creditor.

In my situation, due to a mistake on my attorney's office part (a paralegal made reference in writing to discussions that attorney and I were having regarding omitting lease from schedules) we decided that in the best interest of all around CYA we would go ahead and list this lease.

I promptly touched base with my landlord (new relationship only 3 months old I might add) and discussed this with him, telling him that 1. I did not want him to be surprised by the notice, 2. he had no involvement whatsoever, and 3. it affected him or our relationship in any way. He still was kind of freaked out, understable I guess since he never dealt with this subject before and he is dealing with a relatively new tenant. I went so far as to tell him that we listed him to make sure his interests in the lease were protected and unaffected (yeah, a stretch, but I was getting tired of him freaking out).

Result: Lease is unbroken, he is somewhat jittery and requested an additional month deposit, which I refused, offering to meet him halfway AND full refund of additional half month upon renewal of lease next year.

Conclusion: I would not list the residential lease on your schedule G and SOI part 2 if I could avoid it. My experience was not awful, but certainly not pleasant for either of us. Some argue that technically your lease is not in a creditor position because you pay month in advance, not arrears, however language in schedules and SOI is clear about unexpired leases, not only creditors. If I could go back I would have fought my attorney on this one point. Worst that can happen is trustee asking if you have a lease and why did you not list it...to which answer is ooops, oversight. Maybe a continuation of the 341 or fix on the spot. If trustee is a stickler he might ask you to amend schedules, in which case your landlord might get notified, but I think it's worth the risk.

Just my experience and two cents. I am living, learning and sharing.

[AngelinaCatHub]

I believe you did the right and moral thing. He, sooner or later would probably find out. Your courtesy will pay off.

I can understand his concern, but you do have a lease and it goes BOTH ways. As long as you are current on rent, he is by contract, obligated to not hassle you. By the time the bk is discharged, he will know you better and his confidence in you increased as well as your forthright honesty. 'Hub

[kartoons19]

Joe, sorry to hear that your landlord wanted additional funds. As mentioned in other posts on this topic, I listed the lease on my paperwork, but when I asked my attorney if the landlord had to be notified, she said no and she left them off of the filing schedules. So far it hasn't been an issue. Given that my attorney has been handling BKs for 20 years, I trust she knew what she was doing.

It's tough to know which way to go on this issue, it can be damn if you do, damn if you don't. In all of the 341s I observed, the issue of a rental lease never came up, unless the debtor was the landlord.

[Okieblue]

We lease a home from a mgmt company and they state in their contract that we have to notify if we file. We have lived in our house for 4 years. If they were to not renew our lease due to BK scares me. Rents are expensive here and only going up. I was wondering if the courts asked because of the deposit associated with renting.

[kartoons19]

At least in my case the trustee didn't mention anything about the deposit. Then again I have only a $50 deposit for my apt.

[Okieblue]

We've got a thousand wrapped up, some of it is for a pet deposit.

[helpmeout]

You have a lease. He can ask for more of a deposit, but he can't evict you if you don't pay it. As long as you follow the terms of the lease. Unless your lease says that he can ask for more of a deposit at the whim of the landlord, that is.

And if you do go ahead and pay it, be sure to have the lease amended to show that.

[ccsjoe]

I believe you did the right and moral thing. He, sooner or later would probably find out. Your courtesy will pay off.

By the time the bk is discharged, he will know you better and his confidence in you increased as well as your forthright honesty. 'Hub

Thanks Hub....I think I needed to hear someone tell me this.

[ccsjoe]

Joe, sorry to hear that your landlord wanted additional funds. As mentioned in other posts on this topic, I listed the lease on my paperwork, but when I asked my attorney if the landlord had to be notified, she said no and she left them off of the filing schedules. So far it hasn't been an issue. Given that my attorney has been handling BKs for 20 years, I trust she knew what she was doing.

It's tough to know which way to go on this issue, it can be damn if you do, damn if you don't. In all of the 341s I observed, the issue of a rental lease never came up, unless the debtor was the landlord.

Yes, it was the paralegal's screw up of mentioning what we were doing in writing that opened the door for CYA. Otherwise we would have left it off. But what's done is done. I told him he won't get a dime until we get our discharge because the money may then be considered preferential payment and the court can go after him. I'm hoping by then, post discharge, we'll have another talk and he'll be more reasonable in realizing we are not really a risk.

[ccsjoe]

We lease a home from a mgmt company and they state in their contract that we have to notify if we file. We have lived in our house for 4 years. If they were to not renew our lease due to BK scares me. Rents are expensive here and only going up. I was wondering if the courts asked because of the deposit associated with renting.

Technically the deposit does need to be exempted. Technically. However, per toons, she never heard this come up at any 341, so I don't know. I think in your case it's more the management company wanting to mitigate risk by including the bk clause in their lease agreement. If you're planning on filing I'd get well versed n your state's tenant/landlord laws and see what protection you have; it may even contradict the bk clause in your lease.

[ccsjoe]

You have a lease. He can ask for more of a deposit, but he can't evict you if you don't pay it. As long as you follow the terms of the lease. Unless your lease says that he can ask for more of a deposit at the whim of the landlord, that is.

And if you do go ahead and pay it, be sure to have the lease amended to show that.

Yup, correct. And heck yeah, the lease will be amended. But as I said to toons, this won't happen until December post discharge, so I'm hoping he will be less jittery by then and realize this is not necessary since we are not a risk.

[kartoons19]

Yes, it was the paralegal's screw up of mentioning what we were doing in writing that opened the door for CYA. Otherwise we would have left it off. But what's done is done. I told him he won't get a dime until we get our discharge because the money may then be considered preferential payment and the court can go after him. I'm hoping by then, post discharge, we'll have another talk and he'll be more reasonable in realizing we are not really a risk.

Does your lease say anything about having to notify the landlord if you file bk? If it does, does it also say they can raise the deposit? It seems like if the lease doesn't allow for them to change the terms of the deposit then they are in violation. Then again, I'm not an expert in this area. If it does say that you are to notify them of the bk, then you did the right thing. Either way, hopefully after three more months of paying the rent on time the landlord will see that you are not a risk and will leave it be.

I did check my lease and it did not mention that I need to notify them of the bk, that is another reason I felt it was okay to leave them off of the mailing matrix.

Hope it works out for you.

[ccsjoe]

Does your lease say anything about having to notify the landlord if you file bk? If it does, does it also say they can raise the deposit? It seems like if the lease doesn't allow for them to change the terms of the deposit then they are in violation. Then again, I'm not an expert in this area. If it does say that you are to notify them of the bk, then you did the right thing. Either way, hopefully after three more months of paying the rent on time the landlord will see that you are not a risk and will leave it be.

I did check my lease and it did not mention that I need to notify them of the bk, that is another reason I felt it was okay to leave them off of the mailing matrix.

Hope it works out for you.

Toons, there is nothing in my lease about bk language...I should know, I drew up our lease....LOL. This is more not so much about getting contentious but about negotiating. Yes, I know he is unilaterally attempting to change the terms of the lease regarding security deposit, and I know I could stop him cold if I wanted, but at the same time, I would rather negotiate this out and educate the guy about bk and what risk it really means to him.

[kartoons19]

Okay, makes sense. It sounds like you know a lot more about leases than I do! Like I said, hopefully after a few months, he will see that the bk is not an issue. Good luck.

[UghUghUgh]

Nice of him to kind of kick you while you are down. What is a few hundred dollars to him in the long run? Even if filing BK meant he was no longer gonna get JACK then you would have to leave and he would lease to someone else. I am glad he did not freak out on you totally and ask you to leave. I hope he gets over his jitters soon and as you say maybe he will just let this all go when you are status post discharge.