Client w/judgement files Chapter 7

[PixelRogue]

What is the name of your state (only U.S. law)? PA

Former tenant with outstanding judgement for back rent and expenses filed Chapter 7.

Received a letter from defendants council that client was advised and filed a petition to file Chapter 7. So collection efforts ceased for the time being.

What are my options?

Also, read where there are few cases (such as child support) that are exceptions to the Chapter 7 release of liability ~ and in that information landlord back rent was mentioned.

So will the court then liquidate and I'm in a queue along with other creditors and various judgements to be cured? What other efforts can I take to ensure the best possible outcome?

Thank you to anyone who has information or would be able to share your past experiences.

 

[racer72]

Chapter 7 means total liquidation of the debt, unless you have place a lien on any real property, your judgment will become worthless. Even having a lien may not help. Your best possible outcome would be to talk to a bankruptcy attorney to see if it is worth the time to challenge the bankruptcy. You will likely find it won't be worth the effort.

 

[PixelRogue]

Thank you...

Yes, I was thinking the same and hoping there are angles to address. The tenant closed the bank account from which the bit of rent was paid, but have three other active bank accounts (though I do not have those account numbers).

The judgement was filed with the country court house where I was told once it was filed, there is a lien against the property should the property ever sell or refinance. I'm doubtful.

From part of what I had read, certain debts would not be liquidated such as child support and unpaid rent <- hoping that is true. The unpaid rent was a more recent exception made to the Chapter 7 laws.

So you mention liquidate 'debt' and here I was thinking liquidation would be liquidation of assets.

 

[PixelRogue]

Chapter 7 - Rental Property Exclusion (?)

So here is some what I'm reading:

"BACPA limited the applicability of the automatic stay in eviction proceedings. If the landlord has already obtained a judgment of possession prior to the bankruptcy case being filed, a Debtor must deposit an escrow for rent with the Bankruptcy Court, and the stay may be lifted if the Debtor does not pay the Landlord in full within 30 days thereafter."

 

[ecmst12]

Sounds like that would only apply if they still lived at your property and were trying to avoid eviction.

 

[latigo]

. . . read where there are few cases (such as child support) that are exceptions to the Chapter 7 release of liability ~ and in that information landlord back rent was mentioned.

I don&#8217;t know what you read to prompt that statement, but neither &#8220;landlord back rent&#8221; nor a judgment for landlord bank rent is &#8220;mentioned&#8221; in either 11 USC Sections 362(b) as an exception to the 362 automatic stay or as a non dischargeable debt under Section 523(b).

(My) judgement was filed with the country courthouse where I was told once it was filed, there is a lien against the property should the property ever sell or refinance. I'm doubtful.

There could be some misconception on your part here as well.

I don&#8217;t know what you take to mean &#8220;the property&#8221; as in &#8220;a lien against the property&#8221;. But once your Pennsylvania judgment was indexed it became a lien on any real property (and only real property) as located in the county owned by the judgment debtor. PA Code Rule 3023

So here is some what I'm reading:

"BACPA limited the applicability of the automatic stay in eviction proceedings. If the landlord has already obtained a judgment of possession prior to the bankruptcy case being filed, a Debtor must deposit an escrow for rent with the Bankruptcy Court, and the stay may be lifted if the Debtor does not pay the Landlord in full within 30 days thereafter."

What you must be referring to are the 2005 BACPA added subsections (10), (22) and (23) to 11 USC 363(b). Neither are apposite to your inquiry. They deal strictly with unlawful detainer cases and a tenant in possession.

In sum, the sad facts of life are:

(1) Your judgement is subject to the 362 automatic stay order. You have not legal grounds to have that stay order lifted. To attempt to enforce the judgment would result in your being cited and held in contempt subject to the imposition of court sanctions. Not an enviable position when standing before a federal judge

(2) The subject matter of your judgment does not fall within any of the exempt debt categories listed in section 523(b). Meaning that the debt is dischargeable.

(3) Unless you can establish that at the time your judgment was indexed the debtor held and continues to hold a recorded interest in real property located in that county, your rights are limited to that of an unsecured creditor.
____________________________

This is indeed unfortunate for you as your options are literally nil. Hopefully you are not in the position as many landlord who are facing foreclosure for this very reason.

Just be sure that in the future you require an adequate security and at least one month's rent deposit to cover such happenings.

Then do not grant the tenant any latitude whatsoever. Be at the doorstep with the 15-day notice in hand at daybreak of the second day the rent was due and unpaid!

Good luck