Re: Need advice on pre-bankruptcy prospect for vacancy

Re: Need advice on pre-bankruptcy prospect for vacancy by outabout (CO) on March 23, 2012 @01:54

My ex-tenant filed BK and named me as a creditor. They moved out 9 months into the 1-year lease, their rent was current and they didn't do too much damage. So lucky for me I didn't have to evict, I used their SD to cover one month's rent that I lost. I had to pay for cleanings and their unpaid utilities.

Tenant's filing BK definitely affects LL's ability to evict, and BK court gives the debtor a choice to either assume or reject the lease. So even though you may say the BK terminates the lease on your lease, it is over-written by the BK law. I agree the strategy is to not let the tenant incur pre-petition debt, because you could only collect those on the "BK dollars". If the tenant stays and incurs post-petition debt, it is treated as "administrative expense", and the trustees will make it the priority to be paid.

My ex-tenant filed in July 2011, it was discharged a few months later. I got the court letter stating there was no asset to pay creditors. Then in Feb 2012 I got another letter saying there appeared some asset. I need to submit my expense sheet to the court before May. I am not very hopeful of getting anything significant back, but it does show that the legal system is working, albeit slow.

Some good information:

http://www.nolo.com/legal-encyclopedia/bankrupt-tenants-how-new-bankruptcy-29689.html

http://www.bernsteinlaw.com/publications/tenant_res.htm

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Re: Need advice on pre-bankruptcy prospect for vacancy by OK-LL on March 23, 2012 @08:02	[ Reply ]

Since you used the tenant's SD to cover lost rent, I wonder if the BK court is going to consider the damages you reqeust, since they sprang up after the BK was filed and the tenant moved out. Please let us know how it turns out.

Re: Need advice on pre-bankruptcy prospect for vacancy by outabout (CO) on March 23, 2012 @12:16	[ Reply ]

The only damage that I would claim will be their unpaid utilities, which I paid; also the cleaning fees. These will be treated as pre-petition debt, paid by "BK dollars". I will follow up when this is completed.