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LegalCornerTM - Bankruptcy Basic Facts F.A.Q.'s

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Q.My tenant filed bankruptcy, what can I do?

A.If your tenant breached the lease agreement before he or she filed for bankruptcy, you can seek relief from the Automatic Stay to begin or continue eviction. If the leased property is not the debtor's personal residence, the trustee or debtor in possession must assume the lease within 60 days of the filing, or the lease will be rejected. If the lease is rejected, the trustee cannot attempt to assign the lease to a third party; you can evict the bankrupt tenant immediately unless the trustee determines that the property must be occupied for the sole purpose of selling or relocating assets of the bankruptcy estate. The silver lining to this delay– any post petition rent due will become an administrative claim (highest priority).




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