Expert: Terry Leeders - 3/9/2011

Question
Our landlord was granted a chapter 7 discharge in Illinois last month. Under what circumstances would they still be entitled to collect the rent? Should the rent be held in some type of self imposed escrow account? They had previously stated that their bank had determined their rental properties (several)had no value. I assume perhaps all had upside down mortgages. Last month they said their attorney told them to continue collecting rent because their bankruptcy was not final and they were still responsible for maintaining their properties. However now that it has been granted I'm not sure they still own the property. Thanks.

Answer
Your lease terms still control, as the debtor is still the owner.
IF the debtor broke the lease in the case, and did not assume the lease, you can still live there until the end of the lease if you are current on the payments and continue them until the end of the lease, or you can move out and not owe any more, your choice. The same goes for month to month. Just because a debtor files bankruptcy, nothing changes for the lease otherwise.