Legal Question in Bankruptcy in California
bankruptcy law
My former landlord failed to return my security deposit and is protected under federal bankruptcy laws after filing for a chapter 7. After wining a small claims case, I received a letter from the landlord's attorney telling me I had to dismiss the case. How is the landlord protected from my case when he essentially stole my money by spending a security deposit that wasn't supposed to be touched? Can I still pursue the money by having a levy placed on his current tenant's rent or do I have to dismiss the case? What are the consequences?
1 Answer from Attorneys
Re: bankruptcy law
If you do not dismiss the action you can be held in contempt by the bankruptcy court and can be sanctioned (i.e., fined) for refusing to do so. When a person or entity files bankruptcy it is illegal to take any action against them unless with permission of the bankruptcy court. Bankruptcy means a person cannot pay their debts and each creditor could make the same argument you are making, that the bankrupt person "stole" their money--but if there is no money to repay all the creditors, there is not much that can be done. You can file a claim in the bankruptcy case and/or pursue an adversary claim in the bankruptcy court, but this would likely cost you more than the security deposit. You certainly cannot try to recover any money on your own.
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