As a landlord in Utah, one of the worst things that can happen is for a tenant to file for bankruptcy. This can leave you in a difficult position, as you may be unsure of how to proceed with collecting rent, evicting the tenant, or even whether you have the right to terminate the lease agreement.
However, there are steps you can take as a landlord to protect your interests if you find yourself in this situation. Here are some things you should do if your tenant declares bankruptcy in Utah: (please note - this not considered legal advice and it is always recommended that you contact a bankruptcy law expert for help with your specific situation)
1. Confirm that the tenant has actually filed for bankruptcy
The first step in this process is confirm that the tenant has indeed filed for bankruptcy. Since a tenant in Utah only receives protection after actually filing bankruptcy, the landlord can typically demand rent until receiving the bankruptcy notice. After receiving the notice, the landlord must comply with all bankruptcy laws.
2. Consult with an attorney
If your tenant files for bankruptcy, it's important to consult with an attorney in Utah who is experienced in bankruptcy law. They can help you understand your rights and obligations as a landlord and guide you through the process of dealing with a tenant who has filed for bankruptcy.
3. Determine the type of bankruptcy filed
There are different types of bankruptcy that a tenant in Utah may file, and each one has different implications for landlords. Chapter 7 bankruptcy, for example, is a liquidation bankruptcy in which the tenant's assets are sold to pay off creditors. In Chapter 13 bankruptcy, the tenant creates a repayment plan to pay off debts over a period of three to five years.
4. Follow the proper eviction procedures
Proceeding with a standard eviction is a fairly straightforward process that can take 2-3 weeks; however, once a tenant has filed for bankruptcy, this process becomes extremely complex and may take months to finalize. Due to the protections that the tenant receives, a landlord in Utah must be follow strict adherence of the bankruptcy code or risk negatively impacting his/her case. It is always best to consult an attorney to help navigate through this process.
In conclusion, dealing with a tenant who has filed for bankruptcy can be challenging for landlords in Utah. However, by understanding your rights, consulting with an attorney, and following the proper procedures, you can protect your interests and minimize any negative impact on your investment.
Want help navigating through the eviction process? Consider hiring a property management company!
If you do not want to deal with the stress of processing an eviction, consult with a Utah property management company, like Wolfnest. With the right approach, partnering with the right property management company will provide financial benefits and peace of mind.
If you're looking for a trusted and reputable Utah property management company, get in touch with us immediately to learn more about our offerings and find out why Wolfnest is the best option for your needs.