Related topics

Some Tenants See Bankruptcy as Way to Avoid Eviction

December 3, 1991

PHILADELPHIA (AP) _ Forced to either leave their homes or pay back debts, some of the city’s public housing tenants are instead choosing bankruptcy.

As a result, $585,911 in back rent owed by hundreds of residents to the city’s Housing Authority was erased through bankruptcy filings in the 12 months ending in March, the authority said.

The practice has become so routine that many tenants file for bankruptcy without lawyers, dropping off handwritten forms at the city’s federal courthouse.

Public housing tenants can be viewed as good candidates for bankrupcty because they often have few assets creditors could claim to settle debts.

″Quite frankly, poor people have realized they can file for bankruptcy too,″ said John Paone, the authority’s executive director. ″It’s not just for rich people.″

Paone accused the tenants of ″ripping off public housing,″ but attorney Michael Donahue of Community Legal Services said many tenants who file for bankruptcy are victims of the authority’s poor repair record.

″The place is an absolute pit and they got tired of paying for it,″ Donahue said.

The authority also has had a poor record for collecting rent. In 1989, nearly 30 percent of the system’s 21,000 households were not paying rent, the newspaper said.

Hattie Richardson stopped paying her $269 monthly rent on her North Philadelphia home in the mid-1980s. Her toilet is broken, and it took the authority nearly three years to fix a collapsed kitchen ceiling, she said.

The authority tried to evict her in 1988, but she filed for Chapter 7 bankruptcy, which erased her $5,169 deficit and allowed her to remain in her home.

Richardson is now paying her rent each month, as required by her bankruptcy filing, and said all repairs on the home still have not been made.

The authority’s attorney contends she and her children destroyed the house, but she denies it.

While private landlords have relatively wide eviction powers, federal regulations require public housing authorities to have ″good cause″ to evict a tenant. Rent delinquency qualifies as a cause, but bankruptcy eliminates it.