Legal Question in Landlord & Tenant Law in California

Re: bankruptcy effects on rental contracts

The tenant can avoid or reduce his debts by filing for bankruptcy if he is eventually discharged. This goes on his credit record, of course.

Sending a note saying he has filed for bankruptcy is not enough. He would have to list you as a creditor in his bankruptcy filing. Normally you would receive notice of the case and an opportunity to participate as a creditor. If he does this, the small claims court cannot hear your claim; it must be heard in the bankruptcy court.

Don't just drop your small claims case. Wait and see if the tenant actually files for bankruptcy. If he does, consult a bankruptcy attorney. If he doesn't get your small claims judgment, record an abstract of the judgment with the County Recorder and have the Sheriff levy on any assets the tenant has.

Re: bankruptcy effects on rental contracts

He cannot avoid paying by just filing for BK and sending you a note. The debts must be discharged by the Bankruptcy court.

You should go ahead and sue. If he files BK and it is discharged, you may not be able to collect, but he will have a blemish on his credit for 10 years.