Eviction on a tenant filing a bankruptcy?

Question

I have a tenant late paying April rent. I gave her 3 day notice and She  told me that she filed bankruptcy  last week and also planned to move out on 4/30.  I do have one month deposit but she has about $1800 unpaid past utility bills. I understand filing eviction has some costs too. In this case, shall I  let it go and take the loss of utility bills and cleaning cost later on? I hope the property didn't have any damages. i plan to do an inspection before they move out.  Thanks for your thoughts on this! Nina

Account Closed · Answer

Yikes - danger!   Lawyer up. Bankruptcy is a federal matter and there is likely an automatic stay on all attempts to collect debts. You may want to get a lawyer (an experienced one) to lift the stay so that you can motion toward eviction and then collect any balances. If I were in this circumstance, I would have zero direct contact with the tenant and let the lawyer speak on my behalf. I believe there are significant fines if you attempt to collect debts while a stay exists during someone's bankruptcy.

Tim Miller · Answer

I agree with Jonny R. Lawyer Up! But in somewhat simple terms, if they filed for bankruptcy on April 5th 2022 you have to stop all collections activity and you have to stop any eviction process. You can file with the bankruptcy court what their outstanding debt is but in all reality, you won't see a penny.

Now come May 1, 2022 if they don't pay rent. You can start the eviction process because this is a debt they occurred after filing. But again, LAWYER UP!

Drew Sygit · Answer

@Nina Ning

DO NOT ASK FOR PROOF!

Why are you begging to do their job for them?It is their responsibility to follow the law and provide you proof.

Steven Foster Wilson · Answer

I would also reach out to local PM companies. ask for their advice. I had a similar incident that happened not too long ago and it was what finally pushed me over to do property management. I cannot believe I did not do it sooner.

Steven Foster Wilson · Answer

Have you looked at applying for impact? The government started this with Covid.

Account Closed · Answer

Could also pursue pandemic forbearance if a period of mortgage payment deferment could be helpful.

Henry T. · Answer

Find out if the bankruptcy is legit.

Nina Ning · Answer

Thanks for everyone chimed in!

@Drew Sygit $1800 of utility expense are accumulated in the past months. They were paying the rents before April but not the utilities. They didn't respond to me when I tried to collect that. So I sent them a notice of not renewing the lease in the end of May and thinking to use the deposit to cover the utilities. Then it came to this bankruptcy filing of tenants. You are right, I should ask for the proof of bankruptcy filing. Who knows if they are lying or not. Thanks Nina

Drew Sygit · Answer

Start the eviction unless the tenant, or their bankruptcy attorney, provides proof of the bankruptcy filing.

You do not have to take a verbal notice.

Tenant could be lying to stay longer for free.

Also, how did you let the tenant get $1800 behind with utilities? Fix that problem ASAP!

Eviction on a tenant filing a bankruptcy?

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