Paradise954

Rent Payments - Post BK Filing Florida Lease agreements

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Filed for BK chapter 7 a week ago... question pertains to my current lease I have with my apartment complex. 

 

I am securing new job with company out of state and was wondering if I should pay my rent to my current landlord and what would conseqences be if I didnt?   Long story short, If I am moving say in next 45 days or so, why pay my rent against my current lease... lease will be listed in BK.... and I can elect to terminate with BK trustee, correct?

 

what are consequences to me since the rent due would by post-BK?  if any?      I dont want to pay out any rent if current lease agreement would be dismissed in BK filing anyway and I am moving anyway?

 

I hope my question makes sense......

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@Paradise954 - It makes sense, but you could possibly be sanctioned for doing this.  You can't just decide to not pay current bills if you are filing bankruptcy.  It seems the same to me as if you ran up credit card bills right before filing.  The trustee may not allow this.  

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If you listed the lease in your bk petition, you are not liable for any rent payments.

You've done nothing wrong.

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Filed for BK chapter 7 a week ago... question pertains to my current lease I have with my apartment complex. 

 

I am securing new job with company out of state and was wondering if I should pay my rent to my current landlord and what would conseqences be if I didnt?   Long story short, If I am moving say in next 45 days or so, why pay my rent against my current lease... lease will be listed in BK.... and I can elect to terminate with BK trustee, correct?

 

what are consequences to me since the rent due would by post-BK?  if any?      I dont want to pay out any rent if current lease agreement would be dismissed in BK filing anyway and I am moving anyway?

 

I hope my question makes sense......

I understand your question perfectly...

From a purely Financial Point of View, it would not make sense to pay the rent, but...

Based upon filing BK, you could probably stay in  your apartment for about 90 days rent free...Filing BK immediately stops any collection actions, however the Landlord could and probably will file a motion seeking dis-posession of your rental unit...That would take at least 30 and probably 60 days...

I guess the main question would be is have you already arranged for new living quarter where you are moving to?

 

If so, do not throw away your hard earned cash, keep it for yourself...

I am not an attorney and I am not providing any legal advice...But I have filed BK myself several times and know a little bit on the subject...

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You said that you filed BK a week ago and that the lease will be listed in the filing. Is that just a typo and that you have listed it in the schedules filed already?

 

Like any many other obligations, loans, car leases, etc., you will be given the opportunity to affirm the rental lease obligation/debt. Otherwise the Trustee has 60 days to assume or reject the lease. I don't believe there is any provision in the BK Code that makes you responsible for post-petition lease payments prior to you reaffirming the obligation.

 

Again, the critical question is - is the lease listed in the papers filed?

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If you listed the lease in your bk petition, you are not liable for any rent payments.

You've done nothing wrong.

Bingo,

 

Yes, the lease was listed in the Schedule G and also the landlord was listed in the creditors matrix.   I have an excellent attorney and all was covered in my filing.   It has been sometime since I posted and my discharge.date is set for next Monday the 28th.    I did reject the lease and it was filed with the BK court and landlord was notified.   I did live in the unit for an additional 2 weeks without paying rent, but as I understand it, it will be taken care of and discharged through the BK being they are on the Schedule G and creditors matrix.   

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Correct, if you included the lease in the BK filing, then all debt accrued due to the lease is discharged. The landlord in this case is SOL. I would not use this landlord as a reference however.

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You said that you filed BK a week ago and that the lease will be listed in the filing. Is that just a typo and that you have listed it in the schedules filed already?

 

Like any many other obligations, loans, car leases, etc., you will be given the opportunity to affirm the rental lease obligation/debt. Otherwise the Trustee has 60 days to assume or reject the lease. I don't believe there is any provision in the BK Code that makes you responsible for post-petition lease payments prior to you reaffirming the obligation.

 

Again, the critical question is - is the lease listed in the papers filed?

Yes, the rental agreement was listed in the Schedule G and landlord was included in the creditors matrix.   The lease was rejected and this was filed with the court 60 days after filing.   I did pay rent for 2 months (August & September) of the 3 I lived there after filing as I had to so I would not be evicted as the landlord could have filed a motion with the court to lift the automatic stay and they would have been granted it.   I probably would have been out in 30-45 days after filing as Florida's process is relatively quick and I was not able to move until this month (October) as I didn't have the funds built up to do so.   

 

As I mentioned, I had a good attorney who advised me the correct action to take so that I was protected and in best position coming out of BK.

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Correct, if you included the lease in the BK filing, then all debt accrued due to the lease is discharged. The landlord in this case is SOL. I would not use this landlord as a reference however.

WhoCares,

Yes, the landlord is pretty much out of luck on recovering anything as this is a No-Asset Bankruptcy. What will be interesting is what happens with the security deposit they have of mine. I understand that once the BK is discharged, I am not obligated to them and if they were to try and collect anything after the discharge (e.g. offset for rent not paid), then they would be in contempt of court due to violating the discharge order. I think my attorney said it was Section 524 of the BK Code that prevents from anyone trying to collect any debt that was discharged in BK. I could sue them for this and would probably win in Federal Court. Based on this, if it is the case, then it may be in the landlord's best interest to return the security deposit.

NOTE: I should add that the LL did not file any proof of claim with the court as the Court instructed creditors not to file unless notified to do so as this was a no-asset chapter 7 BK. I want my deposit back!! :<img src=:'>

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Did you take pictures of your place before you moved out? If not, the landlord could simply come up with a bogus list of damages to the place which is a debt that could occur after the BK filing and keep your security deposit that way.

Also realize, would going for the deposit be worth it money and time wise. If the landlord does not send it to you, you will probably have to fight where the landlord is. You noted that you moved away from the area.

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Did you take pictures of your place before you moved out? If not, the landlord could simply come up with a bogus list of damages to the place which is a debt that could occur after the BK filing and keep your security deposit that way.

Also realize, would going for the deposit be worth it money and time wise. If the landlord does not send it to you, you will probably have to fight where the landlord is. You noted that you moved away from the area.

Yes, I took photos of the unit and got somewhat of a walk through with management. While they didn't sign off on anything, I have photos and provided them with the pictures via email supporting that the unit was vacated in good condition and evidence that there was no damage beyond normal wear and tear. I got no dispute in regards to that.

Per Florida law, the LL has 15 days to return my deposit or send notification of why they would be offsetting any amount against it. I will fight that if they go that route. Already had that plan in place in the event the LL tried that damage crap.

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Whocares,

 

I moved 2 miles up the street, so dealing with this LL would not be an inconvenience or costly for me to do so.   

 

 

Did you take pictures of your place before you moved out? If not, the landlord could simply come up with a bogus list of damages to the place which is a debt that could occur after the BK filing and keep your security deposit that way.

Also realize, would going for the deposit be worth it money and time wise. If the landlord does not send it to you, you will probably have to fight where the landlord is. You noted that you moved away from the area.

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Update: Received letter from LL today and not only are they claiming bogus damages, they are also trying to claim termination fee, late fees, past due rent,etc. There are several things listed. At the end and in addition to keeping my entire deposit, they say I owe another $3000.. Unreal. Clearly, they didn't consult an attorney as they seem not to understand BK and the effect of the lease rejection.

I believe they really set themselves up for big problems with the Federal Court. Particularly with trying to collect on a debt that was discharged in BK. As I understand it, per Section 524 of the BK code, there is a permanent injunction that makes it a violation of the BK code for a creditor to attempt to collect on a debt discharged in bankruptcy.

Anyway, their letter will be sent to my BK attorney for review on Monday and I will update once I hear back.

Note: BK was discharged and Final Decree issued on that same day (case closed) :)

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My opinion purely from what you posted-

 

Not on the hook for post-petition rent. 

 

Stay violation for attempt to collect on you. 

 

The landlord has a perfectly valid right to keep the security deposit under bk law.   It is a setoff.   Can't take anything more- can't ask for anything more!   

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My opinion purely from what you posted-

Not on the hook for post-petition rent.

Stay violation for attempt to collect on you.

The landlord has a perfectly valid right to keep the security deposit under bk law. It is a setoff. Can't take anything more- can't ask for anything more!

What part of the BK law permits them to offset the security deposit? Just curious as they are attempting to offset against the security deposit for termination fees, late fees, some "concession" amount, etc.

Clear violation of discharge per section 524 of BK code?

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Probably the same code that allows a bank to take your home if you bankrupt on a mortgage or repo a car if you BK on an auto loan. I would forgo the security deposit at this point but send a nice curt letter stating that their request for any more mones is in violation of the BK code and that they better tread carefully and even contact a lawyer before continuing.

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Probably the same code that allows a bank to take your home if you bankrupt on a mortgage or repo a car if you BK on an auto loan. I would forgo the security deposit at this point but send a nice curt letter stating that their request for any more mones is in violation of the BK code and that they better tread carefully and even contact a lawyer before continuing.

Thanks. I did forward a copy of the letter from them to my bankruptcy attorney and just waiting on a response.

In terms of foregoing the deposit, if I felt they had a right to offset against things that were not discharged, then I would be more inclined to do so. I will wait to see how my attorney wants to address the situation.

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@WhoCares1000 and @jq26 Per attorney:

Under 11 U.S.C. § 524, the Bankruptcy Court provides debtors with protection from creditors whose debts have been discharged. Once a debtor is granted a discharge from his debts, the discharge injunction precludes any creditors from doing any act to collect, recover or offset the discharged debt.

Key word here is "offset". Can you please post BK section that supersedes 11 U.S.C. 524 and provides creditor right to collect (offset) debt discharged in bankruptcy? Thanks!

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Well I wasn't going to comment on this thread, but I just can't seem to zip it. While you may have the BK laws on your side for any monies owed, I can't help but get the feeling ( from your original post) that just because you fell on some hardship that forced you into BK, you are some how entail tiled to a free place to live until they can get you out, and you want any up front money you paid back to boot.

I am all for helping the person who has fallen on hard times, but not at the expense of others. Let me tell you why. My parents livelihood, and entire retirement income is based on what they make on their rentals. They have mortgages on these places they own, and rely on the rent being paid so they can pay. They get so many people who come in and rent sign a lease, and then don't pay their rent. By the time they can kick them out they have 30 to 60 days of no income on those rentals, along with significant damage to the property they have to get repaired before they can rent it out again. People don't care if they don't own it, and it is all about me me me.

Sorry, but you should be ashamed of yourself. It is one thing to fall on hard times, need help, but it's another to have the attitude that they owe you. I sincerely hope this is one battle you lose.

I may get warned for this post but was well worth it.

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@shellieh98

No harm, no foul as you are entitled to your opinions, but please note that I DID PAY my rent up to the time we rejected the lease and then vacated the property. Although I could have easily not paid my rent while the automatic stay was in effect and later discharged those rents, I morally felt responsible for paying my rent while we occupied the property and assessed our situation. My point here is that this landlord is trying to offset my deposit by assessing charges that were legally discharged (e.g. Lease Termination fees) which is in violation of Federal Bankruptcy law.. Their conduct is illegal and I am asserting my right to defend myself as I am ppermitted to do so. Kinda like the people who have the legal right to defend themselves against lawsuits filed by JDBs. With that said, let me ask you this: Should those individuals feel the same level of shame you wished upon me for defending themselves against a debt they in fact incurred, never paid it back (for whatever reason) and now are using the laws as written to get out from paying back their debt??

I understand your feelings against those who don't pay their rent, resulting in financial harm to your parents' way of earning their living. I feel the same and same reason I paid my rent until we vacated the property. Also note that we left the place in immaculate condition. Painted, cleaned rugs and spent two days scrubbing the apartment....leaving it cleaner than when we moved in two years ago. :)

Hope this changes your opinion, but if not, then so be it.

Well I wasn't going to comment on this thread, but I just can't seem to zip it. While you may have the BK laws on your side for any monies owed, I can't help but get the feeling ( from your original post) that just because you fell on some hardship that forced you into BK, you are some how entail tiled to a free place to live until they can get you out, and you want any up front money you paid back to boot.

I am all for helping the person who has fallen on hard times, but not at the expense of others. Let me tell you why. My parents livelihood, and entire retirement income is based on what they make on their rentals. They have mortgages on these places they own, and rely on the rent being paid so they can pay. They get so many people who come in and rent sign a lease, and then don't pay their rent. By the time they can kick them out they have 30 to 60 days of no income on those rentals, along with significant damage to the property they have to get repaired before they can rent it out again. People don't care if they don't own it, and it is all about me me me.

Sorry, but you should be ashamed of yourself. It is one thing to fall on hard times, need help, but it's another to have the attitude that they owe you. I sincerely hope this is one battle you lose.

I may get warned for this post but was well worth it.

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Paradise,

 

The 524 discharge injunction protects your person from collection. It may not stop a creditor from acting against property of the estate to the extent allowed under 553. The security deposit is property of the bk estate. It should have been listed on Schedule B under item 3. The security deposit does not belong to you as it belongs to your Trustee but is subject to any allowed exemption that may apply. The security deposit may also be subject to the landlord’s competing claim under the setoff provision of 11 USC 553.

 

While the below link takes you to an article dealing with non-residential real property, its premise may still apply. . .

 

http://www.haynesboone.com/tenant_bankruptcy-landlord_security/

 

See also the below link which is a decision from one bk judge - (although not relevant for the decision, setoff rights may apply)

 

http://www.innb.uscourts.gov/opinions/pdfs/1321.pdf

 

I tried to find links that can shed light on this subject but they are few and far between.

 

All I am saying is that the issue is not so simple. In the end the dollars involved may not justify a landlord (or the trustee) fighting over it so you will probably get the $$ back (assuming you listed the asset, claimed the proper exemption and/or the asset, if not exempt, ends up being abandoned with the close of the case - abandonment can only happen if you listed the asset - I sure hope you listed the asset - I hope you get what I am stressing here - listing the asset).

 

Let your bk attny handle this as he/she is best suited to interpret the interplay between sections 362, 524 and 553 as well as your State’s exemptions, the Trustee’s interest in the asset and landlord/tenant law.

 

Des.

 

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@despritfreya

Thanks for the input. To answer your questions... Yes the security depost was listed and listed as exempted. Believe me, I had a great attorney and have no doubt that my case was handled with my best interests in mind.

My case is closed (Discharged and Final Decree ordered end of October; hence the Trustee released from any further duty in administration of my case which was a no asset Ch 7 case) ....and seeing my attorney followed the BK law and left me entitled to not having my deposit offset by discharged debt, then I want my money that I am entitled to back.

Sounds simple enough....although, as you pointed out, it may not be. Do note that the case was declared a no asset case Ch 7 BK and the notice of the 341 meeting stated that creditors were not to file any proof of claims.... The LL was listed under both the schedule G and on the creditors matrix.

Paradise,

The 524 discharge injunction protects your person from collection. It may not stop a creditor from acting against property of the estate to the extent allowed under 553. The security deposit is property of the bk estate. It should have been listed on Schedule B under item 3. The security deposit does not belong to you as it belongs to your Trustee but is subject to any allowed exemption that may apply. The security deposit may also be subject to the landlord’s competing claim under the setoff provision of 11 USC 553.

While the below link takes you to an article dealing with non-residential real property, its premise may still apply. . .

http://www.haynesboone.com/tenant_bankruptcy-landlord_security/

See also the below link which is a decision from one bk judge - (although not relevant for the decision, setoff rights may apply)

http://www.innb.uscourts.gov/opinions/pdfs/1321.pdf

I tried to find links that can shed light on this subject but they are few and far between.

All I am saying is that the issue is not so simple. In the end the dollars involved may not justify a landlord (or the trustee) fighting over it so you will probably get the $$ back (assuming you listed the asset, claimed the proper exemption and/or the asset, if not exempt, ends up being abandoned with the close of the case - abandonment can only happen if you listed the asset - I sure hope you listed the asset - I hope you get what I am stressing here - listing the asset).

Let your bk attny handle this as he/she is best suited to interpret the interplay between sections 362, 524 and 553 as well as your State’s exemptions, the Trustee’s interest in the asset and landlord/tenant law.

Des.

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Paradise,

 

With the asset properly listed and the closing of the case the asset was abandoned and all rights in the same were vested to you, possibly subject to non-bk landlord/tenant law. Since possession of the $$ is in the hands of the landlord he/she/it may still have setoff rights. Again, let the attny figure this one out. Remember, however, if there is a question of law as to who gets what, when, where and why, the cost of litigating the issue may far exceed the dollars involved so, just keep everything in perspective.

 

Des.

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Mailed off my dispute letter today so I preserve my right to dispute the LL attempting to keep my deposit.   While ultimately their right to do so, at least by my disputing it, it places them in a position to respond and prove their right to offset for charges against my deposit.   Just the point of the matter with me.  Not so much the money.

 

Just want them to know that I am not rolling over as this is the same crap they pull on everyone that moves from there.  We have befriended others who have lived there and for those who completely fulfill their lease obligations still face harassment with bogus charges and their attempting to keep every penny of a resident's deposit.   Example,  a nice couple that lived in my building, lived out their lease, gave the required notice and then ended up being charged $1,300  for repairing nail holes and painting of the apartment??  I saw the final statement.    I had been in these people's apartment and their place was very clean and kept tidy.   That was just BS what the LL did to them.  They wouldn't fight it as they felt not worth their time.... so they lost all their deposit. $1,200.

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OK, first off, whatever your sentiments of the landlord do not fall into play. Even when you do not have the extra baggage of a BK, it is sometimes easier to let the deposit go rather than fight for it.

That said, there are many issues involved here and we would need more answers to the questions than you have given us to say for certain what kind of case you have. Even then, there is quite a bit of uncertainty legally surrounding rental deposits that an attorney would be consulted.

The questions are these:

  1. Did the deposit consist of 1 or 2 months rent
  2. Did you move out at the end of the month that you declared BK or did you stay for an extra month or 2
  3. How many months were left on the lease when you moved out

Based on what I could find, the rules are as follows

  • If a tenant remains in the apartment for any months after they filed for BK, regardless of whether they reject or assume the lease, they are still responsible in full for those months as that is considered post petition debt. An example would be that you filed for BK in July and remained in the apartment in August. You are responsible for August and that is not included in the BK or the automatic stay. This is also called administrative debt
  • If a tenant rejects the lease, all rent payments due because the lease has been broken become pre petition debt subject to the rules of BK. However, the law says that the landlord can only claim 15% of the total amount due under the lease. In the 9th circuit, the 15% is calculated based on time remaining (for example, if 6 months remained on the lease, the landlord would be entitled to 90% of a month). In the other circuits, the 15% is based on amount (again, 6 month example, $1200/month rent, the amount due the landlord would be $1080). The landlord can file a claim for that amount if the case is an asset case.
  • I could not find any information regarding damages and whether they are pre petition or post petition debt
  • When it come to security deposits, outside of the 9th circuit, a landlord can keep a security deposit and apply it first to the administrative rent debt (post petition rent), pre petition rent claim (the amount the landlord could claim in an asset case), and then damages. The OP is not in the 9th circuit

So lets say that you filed for BK in July and stayed in the apartment in August and you had 6 months to go on the lease. Your rent was $600 and the deposit was $1200. If we follow this, then out of the deposit would come $600 for August's rent, $540 for the pre petition debt. That is $1140 leaving $60. All the landlord has to prove is $60 in damages and that the damages were post petition debt which the landlord could possibly claim. That leaves for a violation only the pre petition debt beyond the 15% described above. This also puts you at the mercy of who your judge is. It is possible that the judge could rule that the violation was not willful and hence, you are only entitled to the terble damages of $180 and no legal fees meaning you spent a ton of money and time to get $180.

Hence, my advice to remind the landlord of the BK and to seek out legal counsel before going any further and not to worry about the security deposit. In your case, you do not really have unclean hands to make a point, unlike the family you mentioned in your example of what a jerk the landlord is.

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