Good news for tenants! You can wipe out most debt related to your tenancy in bankruptcy!

Tenants often get saddled with debts they cannot pay after renting a house, condo, or apartment.  There are debts for back rent, unpaid utilities, damages to the premises, or unpaid security deposits.  All of these types of debts are dischargeable in a bankruptcy usually with no problem.  A landlord would have to prove fraud or willful and malicious damage to his premises to get these debts to be not dischargeable in bankruptcy.

In some cases there can even be a huge debt left over if you vacate the premises early in a lease.  If you sign a lease for a year and vacate after six months the landlord can sue you for the other six months of the lease.  This can be substantial.  Many of my clients have signed a 10 year lease for a commercial space and then quickly vacated when their businesses failed.  The  landlords then sued and got judgements in excess of $300,000.  These clients quickly filed for bankruptcy and discharged this debt without any trouble and we didn’t ever see the landlords show up at the 341 hearing.

Landlords often threaten you with paying for these debts but just mention the word bankruptcy.  There is nothing they can do once you file bankruptcy if there is no fraud or willful and malicious damage.  So don’t worry when they threaten you with lawsuits.  One of my commercial clients was called to a debtor’s exam about his huge debt for his broken lease.  He showed up with his bankruptcy papers in hand.  The lawyer stuttered and stammered and when she went to the judge he laughed and said she would have to seek redress in bankruptcy court.  We got his discharge and never heard from them again.

Landlords are supposed to make every attempt to re-rent the premises you vacate when you break your lease.  We usually don’t know if they even bother to do this though.  It’s called mitigation of damages.  If the landlord tries but can’t re-rent your vacated premises then you are still liable for the unpaid rent if you don’t file bankruptcy.

Even a debt of $300,000 goes away easily in bankruptcy so don’t worry.  If you are a residential tenant who has a much smaller debt from a few months of back rent then that can be put in the bankruptcy too along with your credit card debts, medical debts, and any other dischargeable debts you may have.

Don’t let a landlord bully of threaten you with a big bill because bankruptcy will wipe it out.  Don’t let them threaten you with a lawsuit either.  A bankruptcy will also stop an eviction and force the landlord to seek a motion for relief from stay before he can remove you from the premises.  If you need more time to vacate the premises then bankruptcy give you extra time to move.

I believe that bankruptcy’s main value is in wiping out those old debts so call a bankruptcy attorney today if you have debts related to a tenancy.

I am a San Diego bankruptcy attorney.  For further information please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation at (619) 702-5015.  Call now for free credit report and analysis!

For a free e-book: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” please send a request by e-mail to: farquharesq@yahoo.com.

Has a creditor threatened you with jail if you don’t pay them? FDCPA says this is illegal!

Has a creditor threatened you with jail for non-payment of a monetary debt?  This is most probably illegal according to the Fair Debt Collection Practices Act (FDCPA).  Collectors often harass and threaten debtors with all sorts of things that they have no right to threaten.  They will often threaten jailing you if you don’t pay today!  A person just contacted me with this problem and the client was threatened by a creditor to have police show up at their work and arrest them if they did not pay today!  And this creditor did not even file a lawsuit yet!

This is clearly illegal!  With no lawsuit filed there is no judgment and with no judgment no legal right to collect on this debt.  This creditor would have to first obtain this judgment which would give them the right to collect but in California there is no going to jail for owing strictly monetary debts.  And to threaten that police will show up at someone’s work and arrest them when they cannot is a violation of FDCPA section 807(4).

In that section it clearly states that an implication that non-payment will result in arrest or imprisonment unless that action is legal and intended by the party is a violation of this law.  In my client’s case there is no arresting or jailing someone for owning monetary debts so this threat was a violation of the law.  If my client could prove it then we could win damages against this collector.  I told this person to tell the collector that they were recording the call next time and see how fast he hangs up.

Section 807(5) restates this and says that any threat to take any action that is not legal or intended is a violation of the FDCPA.  So this collector violated this section too.  My question is can we get this guy to say this clearly into the microphone so we can replay it for the judge?

So don’t take any crap off of these creditors.  I hate to hear these stories and I answer these e-mails immediately.  We live in a great country where we pride ourselves in our freedom but if these collectors can violate the law with impunity then it threatens all of us.

In a previous blog I discussed how these collectors by far receive the greatest number of complaints to the Federal Trade Commission.  They routinely harass, threaten, bother and annoy people and they are now routinely violating the law I believe.  So know your rights and don’t allow them to bamboozle you.

I am an attorney who practices bankruptcy law in California.  For more information please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com .  Or call my office for a free consultation at (619) 702-5015.  Call now for free credit report and analysis! 

If you or someone you know needs to file bankruptcy please get my FREE E-BOOK; 13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” by e-mailing me at: farquharesq@yahoo.com.