wisconsin bankruptcy lawyers

Can I rent a house from someone who is filing bankruptcy?

My great uncle owns 2 houses(in wisconsin) and is filing bankruptcy, the lawyer has told him it will be at least a year or two before he loses possession of the property. My husband and I were offered one of the houses as a place to rent. Are we (and him) legally allowed to do this? I am fine with eventually having to move I am just worried that we will be told to move on short notice, or that someone will get into trouble. Thanks, Heidi

You absolutely can, however, there are some technical issues.

1) If the bankruptcy has not been filed yet, then no problem for you. However, during the bankruptcy process the property will be under evaluation for sale. So you are likely to have a steady stream of visitors of lawyers, real estate agents, potential buyers, bankers and others who will have legal reason to check out the house. They will need to give reasonable notice (normally, 24 hours) but be prepared.

2) If the bankruptcy has been filed, then all financial actions must be reviewed and approved by the bankruptcy court trustee. Since you are relatives, it is quite possible for the trustee to question this, and ask you to fill out additional paperwork to show that you are paying a reasonable rent – not a low rent – as the actual rent should be collected to pay off your uncle’s debtors – if he is giving you the rent at a deal the trustee may disallow it, and require you to pay a higher, “market” rent.

You would never be told to move at short notice. You will always have legal notice to move – normally 30 days.

Hope this helps

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