Re: Risk of accept tenant in Ch 13 BK? - Landlord Forum thread 344758

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

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.

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