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I will be moving out of a Fairfield LLC apartment in September. They have filed for Chapter 11. Will I get back my $1900 deposit

Lake Elsinore, CA |

Will I get my deposit back as an unsecured creditor despite a restructuring under a Chapter 11 bankruptcy of Fairfield LLC?

What are my consequences of not paying the remaining amount of rent equal to my refundable deposits? Otherwise I am taking a chance of never getting back my refundable deposits, right?

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Attorney answers 2


If you do not pay August rent they will probably use your security deposit to pay it. You run the risk of them suing you for damages and reporting you to varius websites that will damage your credit and make it hard for you to rent again.

If they are in a Chapter 11 as a Debtor in Possession they probably have assets to pay the deposit. By law, they are required to pay it within 21 days.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of California. Responses are based solely on California law unless stated otherwise.


In addition to Mr. Fink's comments. A deposit in the amount of $1,900 for an individual's apartment is entitled to priority payment that should be paid ahead of other unsecured (although you may need to file a proof of claim in the case to protect the priority interest) under section 507(a)(7) of the Bankruptcy Code.

Mr. Traurig is a bankruptcy attorney licensed to practice in New York and New Jersey. His response here does not constitute legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. Mr. Traurig strongly advises the questioner to confer with an attorney in their own state to acquire more information about the specifics of their case.