Risk of accept tenant in Ch 13 BK? - Landlord Forum thread 344702

Risk of accept tenant in Ch 13 BK? by Megan on April 28, 2016 @21:37

I am a landlord and my prospect new tenant has an open chapter 13. They are on a payment plan ($1500 per month) which is almost paid off, plus selling their home and paying their mortgages off. They make $200k+per yr. The only reason I'm considering not renting is IF they can possibly add me as a debtor to their BK? Does that make sense? Just wondering what my added risk exposure might me with someone with open BK CH 13. Thanks so much

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Re: Risk of accept tenant in Ch 13 BK? by anon on April 29, 2016 @12:39	[ Reply ]

You should pass. Not qualified for credit reasons: bankruptcy.

Re: Risk of accept tenant in Ch 13 BK? by Anonymous on April 29, 2016 @13:00	[ Reply ]

There is no risk They have all their finances controlled by the U.S. BK Trustee. They cannot default, because they lose everything in the BK if they do. AND the trustee is overseeing the I budget and finances monthly Make contact with their trustee to be sure they have told the trustee, and you are certain they have the monthly alibity to pay in their plan. You could not get a better spot on this, no where else will you find another applicant which come with such a guarantee.

Re: Risk of accept tenant in Ch 13 BK? by MrDan (GA) on May 2, 2016 @20:47	[ Reply ]

It is risky to approve an applicant in an active bankruptcy case, because the bankruptcy petition can later be converted to a different chapter, allowing the resident to live rent free due to the automatic stay going into effect at the point of conversion. Also the active bankruptcy case can be dismissed, only to have subsequent petition subject the lease enforcement to an automatic stay. If you decide to approve a tenant with an active bankruptcy, beware of these issues and you should immediately contact your eviction attorney should you become faced with nonpayment or late payments. Ask for a large security deposit, as if the tenants default, this will be all the money you will most likely receive.