In a recent post, I talked about a tenant claiming a grievance and wanting to terminate their lease. I resolved their grievance and asked them to honor their lease by paying the lease break fee of 2.5 months rent. The amount was significant and so, in order to make it easier to fulfill their obligation, I suggested that we draw up a promissory note at 0% interest and payable over 10 months. He quickly accepted this offer and we signed the paperwork. He was eager because his new apartment manager needed to know that I was satisfied with the terms of the termination of our lease. With this promissory note, I was satisfied.
A week later, I received a bankruptcy notice in the mail. My brand new promissory note was now part of a chapter 13 bankruptcy. After consulting with an attorney, it appears that the value of my $1,200 promissory note now commands the princely sum of $40. Wonderful.
Since my tenants have a couple weeks left on the lease, I could call their new apartment manager and tell them that their new tenants just filed bankruptcy. This would likely void any approval they received from the new manager. The problem is that technically my tenants could stop paying rent to me and stay since they are in bankruptcy. I would then be forced to file a motion in federal court to "evict" them. Given the circumstances, I will just be glad to have them out so they can be somebody else's problem.
You can't bleed a turnip, so don't rent to turnips.
Now that they have abandoned the property, change the locks tomorrow, put the stuff in storage and send them the bill. Once that is done please call the new landlord and let them know. Lets keep the people from taking advantage of other good people.
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