QUESTION
Are there any documents I could get signed to protect these lease from being part of a bankruptcy?
Asked on Apr 18th, 2013 on Bankruptcy - Arizona
More details to this question:
Received a residential rental application from a married couple. Only problems on back ground check are: In 2008 both applicants filed chap 13. App # 1 is currently has a court date in May for chap 7. App # 2 is not a part of the chap 7. Is there any way that these people would not have to pay rent for a period of time if I rent to them? Are there any documents I could get signed to protect these lease from being part of a bankruptcy? Should I rent to them?
6 ANSWERS
No. people who file bankruptcy are no different than other tenants. Rental history is way more important than prior bankruptcies.
Answered on Apr 22nd, 2013 at 8:43 PM
You should be safe. A bankruptcy filing would affect your ability to collect rents that accrued pre-bankruptcy. Post-bankruptcy filing payments are treated as any other debts.
Answered on Apr 18th, 2013 at 10:03 PM
Being a landlord comes with risks and when a bad tenant files a bankruptcy, you have to obtain a court order from the bankruptcy court to be able to evict them. Typically, obtaining that court order can take about 6 weeks, and during that time, you can do nothing to evict the tenant. Any contract that the tenants might sign saying that they wouldn't file bankruptcy or wouldn't include you in their bankruptcy would be void and of no effect. A larger security deposit might help a little, but you already know that no security deposit is ever enough to pay for the expenses of having a bad tenant. Not to say that these folks would be bad tenants, but the risk of having a tenant that may file bankruptcy is greater.
Answered on Apr 18th, 2013 at 9:58 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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I would be very careful, but if you deny renting to them be careful of 11 USC 525.
Answered on Apr 18th, 2013 at 9:05 PM
Bankruptcy Attorney serving Phoenix, AZ
at
Law Office of D. L. Drain, P.A.
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Bankruptcy can directly impact a landlord. To what degree depends on the lease and the law of the state where the property is located. It is best for you to contact a bankruptcy attorney experienced in creditor/landlord work.
Answered on Apr 18th, 2013 at 1:35 PM
Appellate Attorney serving Grosse Pointe Farms, MI
at
Musilli Brennan Associates, PLLC
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I would not rent to them. It sounds like they are seeking to convert to a 7 and you could be out some money or at least delayed.
Answered on Apr 18th, 2013 at 1:35 PM