When someone files bankruptcy, a bankruptcy estate is created for that person. Inside that estate are assets and liabilities. If someone has a savings account, for example, then that is an asset in the estate. If someone has credit card, then that is part of his or her bankruptcy estate. A bankruptcy trustee may, in certain types of cases, try to sell some of the assets to pay for the liabilities, or debts, that a petitioner has. In the past, a rent-stabilized lease was not sold by the trustee to the landlord as if it was property. If the landlord got the lease for someone paying a lower amount of rent than others (â€œrent-stabilizedâ€), then the landlord would be able to charge a higher rent to that person in a new lease. That would be more profitable to the landlord, but it would likely be unaffordable to someone who had a rent-stabilized apartment because to receive rent-stabilization, the tenant must have a limited income.
In a recent bankruptcy case, reported by the New York Times on November 20, 2014, the trustee tried to sell the petitionerâ€™s rent-stabilized lease. The petitioner did not want to lose her apartment eventually as she expected a new lease that would be too expensive, so she appealed this case all the way to the New York State of Appeals. The court ruled in the womanâ€™s favor. The court decided that a rent-stabilized lease was akin to a â€œlocal public assistance benefit,â€ like unemployment payments or disability benefits. Those types of benefits cannot be taken away in bankruptcy, so the court decided that neither could a rent-stabilized lease from a tenant paying his or her rent regularly. Now, bankruptcy will be able to offer the protection it is supposed to provide, and people in debt will be able to file for bankruptcy without fear of losing their apartment.
If you are in debt and are considering filing for bankruptcy, then call the law office of Jayson Lutzky. Mr. Lutzky is an attorney with over 31 years of legal experience in New York. He has represented thousands of satisfied clients over the years and offers free in-office consultations. To set up an appointment, call 718-514-6619. To learn more about Mr. Lutzky, visit www.MyNewYorkCityLawyer.com.