EERock

Dick has an investment property.

Jane rents an apartment from Dick.

Jane's lease terminates at the end of March.

Jane does not pay rent for January. Jane is given a 3 day notice. Jane moves out mid January.

Jane files for Chapter 13 Bankruptcy late January.

Dick applies security deposit to unpaid rent for January.

Question: Can Dick file a collection suit for monies owed for February and March under the lease agreement since these debts were incurred after the Bankruptcy filing? Or do those debts fall under Bankruptcy protection since the lease was entered into prior to the filing?



Thanks in advance for any well informed input.

Bass

my take on this

it wouldn't be worth dick's efforts to try and collect after a filing because at best dick will get pennies on the dollar -

furthermore dick could get in trouble for using the security deposit because that was actually Jane's money to be held in escrow with interest and by using it as a payment for rent payment in Jan it could be considered preferential treatment. if any other creditors find out they could force a payback by dick so the money if divided up between all creditors

also just like any other debt Jane incurred before the filling - she is now protected and the contract between dick and jane was entered into before the filing. dick cannot file a collection claim with any debt collectors per say at best dick could place the claim into the courts with all of jane's other creditors and expect pennies on the dollar when this is settled

in the very least Dick should be thankful he took the security deposit without anyone knowing as long as jane didn't report those funds as an asset and dick should be thankful jane moved so quickly because she could have dragged it out a LONG time by staying in the property and by forcing dick to go to court to remove jane at his own expense

Legal Bill

Most legal actions for money against a bankrupt are subject to an automatic stay.

"Filing the petition under chapter 13 "automatically stays" (stops) most collection actions against the debtor or the debtor's property. 11 U.S.C. § 362. Filing the petition does not, however, stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even make telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor."

http://www.uscourts.gov/bankruptcycourts/b.../chapter13.html


In most cases you file your claim in the bankruptcy court.

Kyras

Haven't seen you since I moved to Orange County. Or maybe I did at a Torrance meet.



^From July 13, 2007 Los Feliz meet.

dean

I guess the lesson to be learned here is, don't be a Dick.

paS2K

That's b/c Dick got screwed and Jane didn't (unless she had a "bartering" relationship with a Dick)

Zippy

dlq04

Legal Bill

Ok, I'm still waiting for me fee.... But of course, I'm a dick.

Lainey

anyone?