Property Management Blog

Open Bankruptcy and Tenant Screening: Phoenix Owner Advisory

System - Monday, August 7, 2017

Did you know that one of the main things we look for when doing tenant screenings in Phoenix, AZ is an open bankruptcy? Why, you ask?

Well, we all know that everyone goes through hard times occasionally in the course of their lifetime. Having a closed BK in your past is not the worst thing in the world. With that said, an open bankruptcy poses an entirely different issue.

An open bankruptcy allows an individual to continue to include debt for several months going forward until the BK is finally discharged. This debt can and often times does include rent and fees or any other tenant charge that happens to be owed at the time of filing as well as adding future rent along the way till discharged. Absolutely nothing can be done in the form of collecting on the debt nor can an owner file for eviction. The tenant basically becomes untouchable for the term of the BK, meaning the tenant gets to live for free until the BK is discharged if they so choose. The only recourse an owner has is to spend the money to hire a lawyer and attempt to convince the judge that his property should be excluded from the BK.

Unfortunately, when a tenant moves in there is nothing we can do to stop them from filing a future bankruptcy but we do avoid an active/open bankruptcy at all costs.

Valentine Sales & Management does a stringent background and credit check on all applicants we screen in the Phoenix area, protecting our owners from loss of rent is always of the utmost importance.

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