Folks,
I am curilous as to how the rest of you handle this situation.
Lets say, the tenant files for bankruptcy protection and stops
paying rent. Gash, it takes over 100 to 300 days for the
bankruptcy court to award a judgement.
The landlord is out of rent during this time.
Do you have a seperate clause in the contract that explicitly
states that in case they file bankruptcy, they understand
and forego their right to a collection stay and you can
evict them and also they understand and explicitly waive
their rights. Initial the statement in the contract ???
I am trying to look for a clause to strengthen my contract.
Well, i can look up the Statues for my state, but the
bankruptcy laws are federally mandated.
I’m not an atty, but I pretty sure that any clause you might put in your contract will be automatically be over-ridden by BK law.
I beileve your only avenue to ask for relief form the BK judge. This is why (IMHO) it is important to use an atty for eviction to counter this common tactic of tenants.
I think this would be a good time to spend some money and consult with attorney. I can’t believe they could live in your rental for free for an extended period of time and not paying. One months lost rent would more than cover for 1/2 hour visit with an attorney.
Krish brings up a point I’ve never thought of (never had to = lucky I guess). I don’t know much about bankruptcy so please let me know if my thinking is wrong on this:
Isn’t bankruptcy a protection against creditors? Which, I understand a landlord is a creditor (sort of – we, in Colorado, don’t have the same collections avenues as, say, the electric or phone company), but shouldn’t an eviction be completely outside of bankruptcy protection? Most tenants pay rent IN ADVANCE of receiving the service (a house to live in), so if they don’t pay they shouldn’t have protection, right?
Sorry to hear of all this. I’m not familiar with bankruptsy law, but there are other ways to get tenants out.
For instance, I once had a unit in my building condemned on purpose so that it was the city would mandated that the tenant had to move. And since she wasn’t paying, I under no obligation to find alternative housing for them. Sure it cost me, but no more than having some jerk living off me for free.
Also, check to see if there is criminal activity. These type of tenants often have alcohol and drug related problems that may be helpful in building a case against them. Another investor friend of mine once had to arrange for a police bust on his own investment property one time because that was the only way he could get some trouble some tenants out.
Bottom line. Look for alternative ways that to get them out.
a BK filing pretty much put everything to stop but the vast majority of cases is nothing more than a 2-4 weeks delay at most and may cuase you to have refiling your UD suit. BK does not stop eviction/only delays it.