QUESTION
Should I sue my tenant for rent before he files for bankruptcy?
Asked on Mar 17th, 2015 on Bankruptcy - New York
More details to this question:
I own a residential rental property. The tenant is moving out and is behind on rent. I have "heard" that he might file for bankruptcy. Should I sue him for the back rent before he files for bankruptcy? Or does it even matter because either way I would become an unsecured creditor at the bottom of the priority list?
9 ANSWERS
As a practical matter, if you know he is going to file BK, why waste the court filing fee to sue the debtor/defendant? If you are not sure, you may want to file your lawsuit. If he does file BK, it depends on which type of BK he files. In most cases, unsecured creditors get nothing, or next to nothing, in a Chapter 7 or Chapter 13 filing. Good luck!
Answered on Mar 18th, 2015 at 3:36 PM
Debt Relief Attorney serving Anaheim, CA
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Marlin Branstetter Attorney at Law
Either way you are unsecured so it does not matter if you sue or not.
Answered on Mar 18th, 2015 at 11:29 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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I need more details, evict him to cut you losses. If it is certain he is going bankrupt don't bother, but only if you are absolutely sure.
Answered on Mar 18th, 2015 at 12:34 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Suing people who are broke isn't much fun, because if you win you don't get any money. Whether or not he goes into bankruptcy.
Answered on Mar 18th, 2015 at 12:32 AM
Consumer Bankruptcy Attorney serving Los Angeles, CA
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Orantes Law Firm
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Advice regarding bankruptcy cannot be provided without more knowledge regarding the Debtor's assets. Even if behind on the rent, for all you know the tenant simply hit some hard times, but really does not qualify for a Chapter 7 case and instead qualifies for a Chapter 13 case, which may provide some distribution to your debt.
Answered on Mar 18th, 2015 at 12:30 AM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Suing the tenant will probably do you know good, if he really files for bankruptcy. If you get a judgment against him, and he firehouse with in 90 days after that, your judgment could be voided. Similarly, if you collect anything from the tenant at least if you collect more than $600 with in those 90 days, you will have received what's called a preference, and the bankruptcy trustee can demand it back. Of course, many people threaten to file a bankruptcy, in the expectation that the news will deter creditors from suing them. So I guess you need to balance your need for payment, the amount you are likely to collect, and the expense of a legal action.
Answered on Mar 17th, 2015 at 7:51 PM
Travis Christiansen
You want to sue now for unlawful detainer and to get an order of restitution issued so that you can remove them before they file bankruptcy. As for the unpaid rent, you may have to wait on that, but you could be done with getting them out before they can file bankruptcy.
Answered on Mar 17th, 2015 at 6:44 PM
Deborah F. Bowinski
You can certainly sue your tenant, but you are correct in that if he does actually file bankruptcy there would be little likelihood that you would recover anything. It becomes a judgment call on your part. If you really believe that he is about to file then it probably is not worth your time and trouble. If you believe that he may just be saying that in order to keep folks "off his back" then it might make sense to sue him and see whether you can collect some of your money in the meantime. Unfortunately, it is sort of a "catch 22" for you. Often it is the filing of a collection lawsuit that actually forces a debtor into taking action and filing the bankruptcy case.
Answered on Mar 17th, 2015 at 6:35 PM
Yes, that is the correct thing to do otherwise you will get rid of the back rent in bankruptcy.
Answered on Mar 17th, 2015 at 6:29 PM