Bankruptcy Indiana

Close to twenty-five years experience as a debt consolidation lawyer offering bankruptcy services in Indiana has taught me about things being intertwined.  When it comes to bankruptcy, for example, personal bankruptcy in Indiana is intertwined more often than not with small business bankruptcy in Indiana.  Spouses’ finances are intertwined. Large corporate bankruptcies generate a bankruptcy ripple effect that relates to suppliers filing small business bankruptcy in Indiana.  You get the idea…

The other day, though, in talking to one of the Columbus bankruptcy lawyers who works in the Zuckerberg bankruptcy law offices south of Indianapolis, he brought out that there are two other things that intertwine in bankruptcy in Indiana, and those are landlords and tenants. In fact, one of the readers of my Indiana bankruptcy blog posed the following question: “I am leasing out a house I own”, he explained, “and my tenant filed bankruptcy.  What happens next?”
 

• If you’re not behind in rent payments, and continue to pay rent, your landlord doesn’t even need to know about the bankruptcy.
   
• If the landlord has already filed an eviction by the time you file bankruptcy, then the landlord can proceed with the eviction.

(I need to insert a reminder here that there are complications that can’t be covered in a blog post – it’s important to have expert legal advice.) 

• If there’s a foreclosure on the property, and mortgage pre-dates the lease with the tenant, the tenant has no legal right to stay on the property.
   
• If there’s no foreclosure action, the bankruptcy trustee will consider the rental property as income-producing property in the bankruptcy plan.  Depending upon the type of bankruptcy (Chapter 7 bankruptcy in Indiana, Chapter 13 debt repayment plan, or Chapter 11 business bankrupty), the court may make decisions about the property that can affect the tenants.
  
  One way or another, the financial fates of landlords and tenants, I’ve learned, are intertwined!