Chapter 7 Bankruptcy & Tenant Rights
If your landlord filed for a Chapter 7 bankruptcy, you have legitimate concerns about your home, your rights and your future. There are specific tenant rights associated with a landlord who has filed for bankruptcy protection.
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Function
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The function of a Chapter 7 bankruptcy is to relieve a debtor of her obligations to creditors. This can include surrendering real estate she owns.
Considerations
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Pursuant to the U.S. Bankruptcy Code, a residential lease agreement will not be interrupted during the rental term despite the bankruptcy action.
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Effects
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A tenant maintains the right to stay in the property for the remainder of the lease term unless he agrees to vacate voluntarily.
Time Frame
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According to the Uniform Residential Landlord and Tenant Act (and similar laws), a residential lease is no longer than one year. Therefore, the maximum time a tenant can stay in a residence in bankruptcy is one year or less.
Misconceptions
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The most common misconception associated with a Chapter 7 bankruptcy and tenant rights is that a renter is removed from residential premises before the end of the lease term when a bankruptcy is filed.
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References
Resources
- Photo Credit Image by Flickr.com, courtesy of Chris Griffith
