QUESTION
As a Landlord am I responsible for paying back garnished wages from my tenant after they filed for bankruptcy?
Asked on Apr 01st, 2013 on Real Estate - Colorado
More details to this question:
I went through a collection agency to evict and recover lost rent from my tenant. After a year of my tenant's wages being garnished through the collection agency she filed for bankruptcy. Now the collection agency is asking me to pay back the last 90 days of her garnishment checks from the date she filed due to the new bankruptcy laws. I understand the new laws but was wondering if it pertains to me as the Landlord or is the collection agency (creditor) responsible? It is not stated in my contract that I would be responsible to pay back money if the debtor files for bankruptcy. I had a consultation with a real estate attorney and he didn't have a concrete answer for me. I would greatly appreciated any answers that anyone could give me. Thank you!
1 ANSWER
3 Awards
Lori,
The filing of a bankrupcty puts into place an automatic stay on the collection of all debts. So the simple answer is someone will be responsible for returning this money to the bankrupcty estate. Your issue is whether you or your collection agency is responible which will be governed by your contract with the agency. I would recommend reading the contract with the collection agency very carefully to see how this or a similar situation will be handled. The question I would ask is how would the collection agency force you to return the money, they took the money from the account and the bankruptcy court will look to them to replace it.
Hope that helps, if you would like to discuss further, I'd be happy to schedule a consultation with you.
Don Eby
Answered on Apr 02nd, 2013 at 3:22 PM
Call Don at (303) 688-0944 or email at Reception@RobinsonandHenry.com This information is provided AS IS; and does not create Client Relationship.