Legal Question in Landlord & Tenant Law in Arizona
I have a perspective renter for who has filed a chapter 13 due to her recently deceased husband's credit card and home equity loan debt she wasn't aware of. The bankruptcy has not been finalized. If we rent to her, could she have the ability to slide her rental lease into an existing and active Chapter 13? Any information would be greatly appreciated. Thank you very much!
1 Answer from Attorneys
Generally, the rule is that debts acquired AFTER someone files bankruptcy are not part of the bankruptcy and can't be discharged. This would be true in this case, provided that the debtor STAYED in Chapter 13. If a Chapter 13 debtor converts to Chapter 7 at any time after the debtor incurred another debt (i.e., your lease), then that new debt (the unpaid lease payments) can be discharged in the Chapter 7, even if it was incurred after the Chapter 13 was filed. So your tenant would stay liable for the lease if she stayed in Chapter 13, but she could get out of it and discharge the unpaid lease payments if she ever converts from Chapter 13 to Chapter 7. Conversions from Chapter 13 to Chapter 7 are very common.
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