Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I buy a home after bankruptcy?”
Mary Santiago has lived in an East Village apartment for nearly 50 years. She still pays a monthly rental of $800. Her right and the rights of other New York residents to rent-stabilized leases may be in jeopardy after a bankruptcy trustee sold Ms. Santiago’s lease to her landlord.
East Village is a neighborhood in Manhattan, which is one of five boroughs that make up New York City, New York. In 2014, the average monthly rental of a studio apartment in a building without a doorman in East Village has run between $2,000 and $3,000. Monthly one and two-bedroom apartment rentals can exceed $4,000.
Rent stabilization programs are used to “protect tenants in privately owned buildings from illegal rent increases” and to ensure tenants receive required services, have their leases renewed if desired, and protect them from illegal evictions. The New York City Rent Guidelines Board enforces the city’s rent stabilization policies.
Ms. Santiago filed for bankruptcy in 2011 following the death of her husband, seeking protection from some $23,000 in credit card debt. Her bankruptcy trustee made a deal with Santiago’s landlord in which the landlord would pay $140,000 to cover Santiago’s debt and bankruptcy costs, in exchange for the termination of Ms. Santiago’s lease. The deal would allow Ms. Santiago to live for the rest of her life in her current apartment, at a monthly rental rate of $800. She would not, however, be permitted to pass her interest in the apartment to her son when she died.
Santiago’s attorney, Kathleen G. Cully, objected to the deal. A bankruptcy court upheld the deal, as did a Federal District Court. Cully appealed on Ms. Santiago’s behalf, and the United States Court of Appeals for the 2nd Circuit referred the case to the New York State Court of Appeals because it involves an interpretation of state law. State officials, including New York City Mayor Bill de Blasio, New York Attorney General Eric Schneiderman and at least 18 state legislators have lined up in Santiago’s corner.
They say that if the bankruptcy trustee can sell Mary Santiago’s rent-stabilized lease to her landlord, then millions of other New Yorkers who live in rent-stabilized apartments are at risk. The bankruptcy trustee treated Ms. Santiago’s lease as an asset—like a car or a house—subject to being sold to pay off Ms. Santiago’s debts. If that interpretation of the rent-stabilized lease is upheld, then in the future landlords could evict rent-stabilized tenants who file for bankruptcy—even tenants who have paid their rent.
Cully argues that the rent-stabilized lease is a public benefit and should be exempt from the bankruptcy estate.
If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.
About the Author
Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.
A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.
Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.
In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.
“View from East Village rooftop” by Francisco Anzola
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