Amidst NY State Court of Appeals ruling NY State lawmakers push to protect Rent Stabilized Leases in Bankruptcy
Update: Since writing this article the NY Court of Appeals has ruled on this case. Refer to ==>Rent Stabilized Lease Update
We have written in the past about the possibility of losing a rent stabilized apartment lease in New York City and about one bankruptcy case in particular that highlights the danger. With the Mary Santiago-Monteverde decision in March 2014 the bankruptcy trustee in New York City now has precedent to sell your rent stabilized lease in order to pay off your debt as if the lease were like any other non-exempt asset in bankruptcy. The case is going to the New York State Court of Appeals in October, but if not overturned a very frightening trend may have been set. People filing for Chapter 7 that have a rent-stabilized apartment lease could be looking at a fresh start on the streets. Fortunately there is at least one lawmaker in New York City that sees the problem and is introducing legislation to protect rent stabilized leases in the future.
Linda Rosenthal, New York State Assembly member of Manhattan, has proposed a bill that will specifically protect rent stabilized leases under Chapter 7 bankruptcy laws. Over a dozen New York State legislators have also asked the state appeals court to rule in favor of the Santiago-Monteverde appeal. The public and the lawmakers appear to be with the tenants on this issue, but the fact remains that if you file chapter 7 in New York City today you may lose your rent stabilized apartment lease. We think people should be able to get the help they need without having to worry about losing their home, so we support these lawmakers 100%. We hope the appeal is successful, and we hope the laws change, but if you are reading this you are probably already looking for help.
If you think you need bankruptcy protection now and can’t afford to wait to see what happens with the Santiago-Monteverde case realize that your rent stabilized apartment lease will be safe if you file for Chapter 13 instead of Chapter 7. Chapter 13 cases are a bit more complicated, but if you are serious about getting a fresh start a Chapter 13 can often provide more protection and a better end result regardless of where you live. Don’t let the fear of losing any type of home keep you from speaking to a bankruptcy attorney. Fear and delay can do more damage to the outcome of your case than a trustee’s hankering for your home.
At this point we don’t know where the Santiago-Monteverde case is going. We hope the appeals court does the right thing, and we also hope that sooner than later laws are enacted to prevent this from happening again. Regardless of the outcome however, there are already ways to protect rent stabilized apartment leases in bankruptcy in New York. If you are struggling to make ends meet and think you may need bankruptcy protection please contact the Law Offices of William Waldner online or at 212.344.2882 to arrange a free bankruptcy consultation. We primarily practice bankruptcy law and know how to protect rent stabilized leases in the process.
**** DISCLAIMER: This article is intended for educational purposes only. By reading no attorney-client relationship has been created. Prior results do not guarantee a similar result for future clients.