When a landlord or property owner files bankruptcy, unique issues often arise. The issues usually include tenants' concerns about whether their lease will survive their landlord's bankruptcy.
In addition, landlords may be concerned about whether a tenant can stop an eviction action by filing bankruptcy. Both of these issues are addressed in the materials below.
This information, though, just provide a general outline. Bankruptcy laws vary widely by state. To connect with a lawyer in your area for a free consultation today, simply fill out the case review form below.
Much like homeowners who file bankruptcy to prevent home foreclosure, landlords in debt also file bankruptcy in order to protect their property.
When landlords file bankruptcy, they can either assume their leases with tenants or reject them. If a landlord assumes the lease, then a tenant continues paying rent as before, as long as the landlord holds up his or her end of the bargain.
If, however, a landlord rejects a lease, which effectively cancels it, the tenant has a few options:
While these are options some tenants may pursue when their landlord is filing bankruptcy, each situation is different and calls for unique actions.
Speaking with a local bankruptcy lawyer may help provide information on your local landlord and tenant laws.
If, on the other hand, a tenant is filing bankruptcy to avoid an eviction, other rules apply. These include:
Thus, it may be possible for a tenant to stop eviction by filing bankruptcy, but this also depends on the vagaries of your state’s property laws.
To learn more about your legal rights when a landlord files bankruptcy, contact a local bankruptcy lawyer today.