There are Three Things that Realtors should know about Bankruptcy:
First, Property Managers need to be aware of the automatic stay that goes in place when someone files Bankruptcy. If you have a tenant that has filed Bankruptcy, you may be violating that stay if you attempt to collect rent payments or evict the tenant during that time. To be safe, you’ll also want to halt evictions and collections.
Second, when you receive notice of Bankruptcy, it might not be as bad as you think. When somebody files Bankruptcy, they have to disclose all of their assets and liabilities to the Bankruptcy court. If your tenant really doesn’t have any money, then it’s better to let them file Bankruptcy. If you open up their books and see that they don’t have any money, you won’t have to waste your time on collections. If they do have assets, then you can look at making a claim against those assets through the Bankruptcy Court.
Third, if you’re not sure, reach out to an attorney or law firm, like Morris Law Center for example. It is better to call and find out whether or not you are in need of help as opposed to making a mistake like violating the automatic stay in Bankruptcy, due to attempting collections or an eviction.
If you are interested in discussing this topic further, give us a call at (702) 850-7998, or click here to schedule a complimentary 15-minute phone consultation with our attorneys.