Full question:
I entered into a 5-year (60 month) lease agreement with a company to rent my property. The company operates an assisted living facility for the mentally impaired. Due to mismanagement of funds, the company went into State Receivership (similar to bankruptcy) . The company petitioned the County Circuit Court for a motion for order to reject the unexpired lease of the rental property. Do I have a legal claim to pursue the money owed (approximately 40 months of rent payments)?
- Category: Landlord Tenant
- Subcategory: Lease Termination
- Date:
- State: Maryland
Answer:
When a company files for bankruptcy or enters receivership, an automatic stay is put in place. This stay halts all collection efforts from creditors, meaning you cannot pursue payment while the stay is active. If you have a claim against the estate, you can ask the bankruptcy judge for relief from the automatic stay, allowing you to collect the owed rent.
Once the bankruptcy case is resolved, any remaining debts may be discharged, ending the court's involvement. This typically leaves the debtor without debts but also with a poor credit rating. It's important to note that reaffirming a debt means the debtor agrees to pay it off despite it being eligible for discharge, which can complicate their financial situation.
In summary, while you may have a claim for the unpaid rent, pursuing it is subject to the automatic stay and the outcomes of the bankruptcy proceedings.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.