Do you have to Tell Your Landlord that You are going to Declare Bankruptcy?
Transcript:
(Editor's note: Brian is Clear Counsel's Communications Director. His prompts represent a conglomeration of inquiries submitted. If you have you have a question you would like answered in an upcoming video, email the inquiry to brian@clearcounsel.com)
Matt: Hi, Matt McArthur here, attorney at Clear Counsel Law Group. Another question I just had submitted to me was from an individual getting ready to file for chapter seven bankruptcy. They're renting an apartment and they wanted to know whether or not they had to let their landlord that they were filing for chapter seven bankruptcy. The answer is yes. There's documents that you file with your bankruptcy case called your petition, schedules, and statements. One of the schedules, which is just how we refer to the section of paperwork in the bankruptcy documents that has a specific category of information that the court wants to know about, is called the schedule G. Schedule is where we list any leases. If you're in an apartment and you're paying rent to a landlord, there's a very strong possibility that you're involved in a lease. That is information that must be disclosed in your bankruptcy paperwork. The landlord will be a listed creditor in your bankruptcy and will receive bankruptcy notice mailings that get sent out by the United States Bankruptcy Court. That's the gist of this question in a nutshell. Brian, did you have any other questions?
Brian: Can a landlord take action against you for filing bankruptcy once they find out?
Matt: Possibly, yes. If you're up to date and you're in good standing under the terms of the lease, the chances are very low that a landlord would want to take any action. If you're paying them the money that they're owed, they'll likely leave you alone and allow you to finish out the terms of the lease.
However, if you become delinquent on the payments to your landlord, the landlord has the right to seek court intervention to see if they want to do an eviction proceeding. That's a process that usually takes 30 to 45 days for the landlord to obtain that permission. They have to file a motion with the court called a motion for relief from the automatic stay, which is essentially the landlord's way of getting court authority to pursue their state law rights that they would have whether or not you had filed bankruptcy. Any other questions, Brian, on that?
Brian: Would you advise someone to be upfront with a landlord and tell them that they were going to declare bankruptcy?
Matt: It depends. You have two choices of how you want to go about this. You can let the landlord know upfront and give them a heads up. Look, I'm getting ready to file for bankruptcy. I still want to be in good standing with you. I plan on working with you. Many landlords will work with you. However, if you have a bad relationship with your landlord, you may not want to give them notice until you actually file for the bankruptcy, because once you file for the bankruptcy, you get that additional protection of the automatic stay, which keeps things in place and would require the landlord to obtain court permission before moving forward with an eviction proceeding before they actually took that action. I think that just about covers this subject on this question. If you have any other questions related to this topic, seek the advice of an experienced bankruptcy attorney. Again, this is Matt McArthur at Clear Counsel Law Group. We'll see you next time.
