WA State-Landlord files for Chapter 7 Bankruptcy. Can Security Deposit be recovered?

[Thecompdude]

Hi,
I live in Seattle, WA. My residential landlord gave me a month's notice and asked me to move out of the condo by end of Feb. After a week of moving out, the landlord filed for Chapter 7 Bankruptcy and I received a notice about the same from the bankruptcy court & his lawyer. I have not received a letter about the deposit or any deductions from the landlord after moving out and it has been 3 weeks since the move out.

As per Landlord-Tenant law Clause 59.18.270 - The claim for security deposit takes priority over all other claims even that of the bankruptcy trustee.

Also as per clause 59.18.280 - I am entitled to full refund since the 14 day waiting period has passed by.

What are my options now? How should I address this situation? Should I approach the trustee? Or should I go to Small Claims court?

Thanks

 

[chryscole]

I'm interested to know what happened with your case?

I'm faced with almost the exact same issue, except our landlords did not ask us to move. We ended the month to month as per contract, yet the landlords did not respond until a month later saying they were filing for bankruptcy. A week later the Form 9A, introducing their Ch 7 bankruptcy arrived in the mail.

I've decided I'm going to file a Complaint Objecting to Discharge, based on USC Title 11 Ch 5 Sub II Sec 523 (a)(4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny. Basically they did not uphold their fiduciary duties by spending the deposit or security. I'm also going to try to back this up by Washington Landlord and Tenant Act, RCW 59.18.270 which goes over the landlords obligation in regards to deposits or securities and in the end states: "The tenant's claim to any moneys paid under this section shall be prior to that of any creditor of the landlord, including a trustee in bankruptcy or receiver, even if such moneys are commingled."

I'm not an attorney and can't afford one; so my hope by presenting code and law the trustee will find that this debt (my security deposit) is not dischargable and my landlords will have to pay it back or I could then take action in civil courts. To the best of my understanding, I cannot take them to civil court presently because the bankruptcy courts supersede. If the amount owed (claim) is discharged I will never be able to recoup the monies. Granted, if deemed dischargable I'm hoping my debt will be to the top of the list of creditors; should there be any assets found I'll get paid first. But what do I know, besides I shouldn't be put out because of someone else's neglectful actions!

Let me know how it ended up!! I'll post my results in the months ahead. Thanks