By Mark Zinman | Zona Law
Question: My tenant owes me two months’ rent and claims they filed for bankruptcy. I know I can’t ask him for the money, but can I file an eviction just to get possession back? If not, am I just stuck with a non-paying resident in my home?
Answer: Unfortunately, you can’t do anything without first going into the bankruptcy court (“BK court”) and getting a lift stay order which allows you to take action against your resident. When a person has filed for bankruptcy, they are protected from any action of a creditor – as a landlord, you may not think of yourself as a creditor, but you are. You can’t demand that they move or demand that they pay you until you first get permission from the bankruptcy court. Therefore, it’s important that you act quickly and get into the BK court to get permission. There are significant penalties for taking action against a person in bankruptcy when you have not first gotten approval from the BK court. It doesn’t matter if you want money or possession of your unit, you need BK court approval.