Tenant broke lease early by unexpectedly moves out 3 months prior to lease expiration and left me (landlord) with a trashed apartment. Landlord was awarded $3100 judgement against tenant, then landlord filed garnishment against tenant. Tenant then files chapter 13 bankruptcy. What are landlords rights and or options?
First, you have the right to file a proof of claim for the $3,100.00. If the Tenant/Debtor owns real property that is not his/her homestead and your judgment was recorded or registered with the county department that maintains records on recorded judgments, your judgment has become a lien on that real property that cannot be avoided in most cases. Thus, you should file a secured claim. It is unlikely that an individual that was renting a house or apartment owns any real property. If that is the case, your claim is unsecured.
How much you will be paid by the chapter 13 trustee will depend upon the plan terms as to payment of creditors in your claim's class. If the claim is unsecured, you could be paid nothing, in full or a percentage of your debt.
It is possible that the debt could be determined to be nondischargeable, but that is doubtful. To establish dischargeability, you must file an adversary proceeding (AP). Court costs for the AP is $350.00. Also, if you file the AP and you lose the suit, the judge can hold that you are responsible for the debtor's attorney's fees. Before you decide to file an AP, you need to seek the advice of an experienced bankruptcy attorney that represents creditors in litigation in bankruptcy proceedings. Some creditor bankruptcy attorneys will meet with you at no charge for the initial appointment. You can use the Avvo "Find a Lawyer" link at the top of this page to search for an attorney.
Answers and comments provided are for general discussion only. My comments are not to be considered legal advice and they do not create an attorney-client relationship.
Attorney Gambrell has provided a complete answer to your question. I will emphasize that the cost of challenging the dischargeability of your claim is likely to exceed the amount of your claim. As you are aware, some tenants can be exasperating.
Mr. Gambrell, as usual, gave you an excellent, thorough answer. Realistically, you might get a little bit from the debtor's bankruptcy plan but I would not count on getting anything, that way if you do get something, it will be a bonus. I know it does not seem like it will be a bonus since you have a judgment for $3,100 but most Ch13s have very low payouts to unsecured creditors, which is what you most likely are. Definitely not worth the costs of filing an adversary proceeding. Those costs and fees could easily be three to four times the amount they owe you and you would not be able to get your fees and costs paid by the debtors. Write the debt off and move on with life.
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Your judgment in Kansas is not a lien on non-exempt real estate because it was filed under chapter 61. Only chapter 60 judgments in Kansas are judicial liens. You need to file a proof of claim in the bankruptcy. If the chapter 13 is paying anything to unsecured creditors you will share with the other unsecureds on a pro rata basis. Assuming the debtor completes the ch. 13 plan, any balance still owed to you will be discharged and you cannot collect it.
First, a disclosure (I am a lawyer, you knew that was coming). Please consider this answer as my thoughts on the situation you described generically. If we were sitting face to face, I would have several follow up questions that I would need to have answered before I would feel comfortable giving any specific direction.
It sounds to me as if the landlord would be considered a non-priority, general unsecured creditor. In other words, the money (regardless of the judgement) would be treated in a similar way as a credit card or medical bill. Under these circumstances, the best the landlord can probably do is file a proof of claim and hope the trustee finds and distributes some property/money during the bankruptcy.
On the other hand, since there is a judgement, it is possible that their could have been a judgement lien that attached to some sort of non-exempt property. That said, this issue is going to take deeper analysis than you will get by posting your question on the internet. You should consult with a lawyer to understand if there is any way to claim a judgement lien can survive the bankruptcy.
To learn more about pre-bankruptcy judgements, feel free to read about it on my blog at:
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