Bankruptcy Law Changes: Tenant Evictions

[bkfiler]

Tenant Evictions - The new law "makes it easier for landlords to evict bankrupt tenants who are behind on their rent." Let me see if I can understand this. I am a debtor who for whatever reason is far enough down that I need bankruptcy. I'm so bad off I can't even pay my rent. So I declare bankruptcy and within a few months I might be able to catch up on the bills that I keep... such as rent. But now the courts permit me to be evicted more easily so where do I live and who is going to rent to me without a major deposit, which I can't afford?

http://credit.about.com/cs/legal/a/040601.htm

[Rona123]

Ironically enough bkfiler, this clause might benefit me. Assuming that all goes well, my discharge should occur in late April. The problem is that my lease expires in March, and no properties will rent to me prior to discharge because under the old law, they couldn't evict me. I'm hoping that I can use this change as ammunition to convince a property to rent to me prior to discharge, otherwise I'm faced with a stiff month-to-month rent premium at my current property. We'll see how that works out!

[StaciMM]

There is a relevant reason for that...

Renting vs. buying is different. If you're buying the house, the mortgage company retains the value in it. Regardless of when they sell it, they'll get about the same amount for it. They really don't lose anything whether they resell it after 2 months or 10. For a landlord, however, any downtime is lost income but they still have to make their mortgage payment, etc. on the property. If someone sits in the apartment-not paying-for 10 months rather than 2, the landlord can't do anything to recoup that loss.

Imagine if you were a small time landlord, had 1-2 rental properties and didn't receive rent for a long time. That could be enough to send YOU into bankruptcy.