I'm a Missouri Landlord and My Tenant Filed Bankruptcy

Here's the reassuring part: bankruptcy is federal law (Title 11 of the U.S. Code), it runs through the Missouri federal bankruptcy courts (the Eastern and Western Districts of Missouri), and it gives you real tools too. Your lease doesn't just vanish, your post-filing rent is entitled to priority treatment, and you have a clear path to get paid on what you're owed. This guide walks you through what froze, what didn't, and the deliberate steps that protect your position.

First, stop everything and read the notice

The instant your tenant filed, 11 U.S.C. § 362 imposed an automatic stay that halts almost all collection activity against the debtor. While that stay is in force, you generally may not:

• Continue or file an eviction (an "unlawful detainer") action;
• Sue the tenant for unpaid rent or send demand letters and collection calls;
• Lock them out, seize their property, or draw on collateral; or
• Take any other step to collect a pre-filing debt.

The stay is automatic and self-executing — it binds you whether or not you've received notice. Violating it is serious: a landlord who keeps pushing an eviction or grabs the space can be ordered to undo it and may face damages and sanctions. So the first move is to stop, then read the bankruptcy notice carefully for two things: the chapter (7 is liquidation, 11 is business reorganization, 13 is an individual repayment plan) and every deadline and hearing date listed.

One narrow exception worth knowing: if a residential eviction judgment for possession was already entered before the petition was filed, special rules can sometimes let that proceed. But for a commercial (nonresidential) lease, the space and the lease generally stay frozen until the court or the Code says otherwise.

Understand that your lease is now an "executory contract"

Your lease didn't terminate when the tenant filed — it became something the Bankruptcy Code calls an executory contract, and under 11 U.S.C. § 365 the tenant (now the "debtor") gets to choose what happens to it. They can:

• Assume the lease — keep it and stay. But to assume, the debtor must cure the arrears (pay what they already owe you, or give you a firm commitment to) and provide adequate assurance of future performance — credible proof they can actually keep paying going forward; or
• Reject the lease — walk away from it, surrendering the space back to you so you can re-let it.

For a nonresidential lease, the Code puts a clock on this decision. The debtor generally must move to assume or reject within a statutory window after the order for relief, and if they don't act in time, the lease is deemed rejected and the space must be surrendered. That deadline works in your favor — it stops a defaulting tenant from sitting on your property indefinitely while deciding.

Demand your post-petition rent — it has priority

This is the part most landlords don't realize, and it's good news. Under 11 U.S.C. § 365(d)(3), while the debtor is still deciding whether to assume or reject a nonresidential lease, they must timely pay the rent that comes due after the filing date. This isn't optional and it isn't lumped in with the old debt.

• Rent accruing after the petition date is a current obligation the debtor must pay on time under the lease.
• That obligation is treated as an administrative-priority expense — meaning it sits near the front of the payment line, ahead of ordinary unsecured claims.
• If the debtor uses your space but fails to pay this post-filing rent, you can ask the court to compel payment or use that failure to push the assume/reject decision.

So while your old unpaid rent is stuck in the bankruptcy, the rent for the months after filing is in a much stronger position. Track it carefully and insist on it.

Calculate your claim — and know the § 502(b)(6) cap

You still get to collect on what you're owed; you just do it through the bankruptcy by filing a proof of claim. Your claim has a few buckets:

• Pre-petition unpaid rent (rent owed before the filing) is a general claim against the estate.
• Damages from a rejected lease — your lost future rent when the tenant walks away — are also a claim, but here the Code limits you.

Under 11 U.S.C. § 502(b)(6), a landlord's claim for damages from a rejected lease is capped. The cap is, broadly, the rent reserved for the greater of one year, or 15% of the remaining lease term (not to exceed three years), measured from the relevant date under the statute's formula — plus any rent already unpaid. The cap limits your future-rent damages; it doesn't erase rent the tenant already owed before filing. Run the numbers carefully, because this formula determines how large your claim actually is.

A couple of practical points: a security deposit you're holding can typically be applied to offset what you're owed, and your claim for the rent due after filing (the § 365(d)(3) administrative rent above) is a separate, higher-priority item that the cap does not swallow.

Take these steps, in order

When a commercial tenant files, a disciplined sequence protects you:

1. Stop all collection and eviction immediately. The § 362 stay is live — no lockouts, lawsuits, letters, or self-help.
2. Read the notice for the chapter, the meeting-of-creditors date, the proof-of-claim deadline (the "bar date"), and any lease deadlines.
3. Demand timely post-petition rent under § 365(d)(3) for every month the debtor occupies the space, and document non-payment.
4. Watch the assume/reject deadline. If the debtor wants to assume, hold them to curing the arrears and proving adequate assurance; object if the assurance is thin.
5. File your proof of claim for pre-petition rent and rejection damages, and calculate the § 502(b)(6) cap so your number holds up.
6. Apply the security deposit as an offset where your lease and the Code allow.
7. Get bankruptcy counsel. Deadlines here are short and unforgiving, and a missed bar date or stay violation is expensive.

Frequently Asked Questions