A Federal Appeals Court has decided that rent-stabilized leases do not count as assets that can be seized during bankruptcy proceedings.
The U.S. Court of Appeals For The Second Circuit Reversed A Lower Court decision on Thursday, the New York Post reported. The decision could prevent New Yorkers in rent-regulated apartments from losing their homes during bankruptcy proceedings.
The ruling treated a rent-stabilized apartment like a public benefit akin to Medicare or Social Security, according to Capital New York.
The ruling is a victory for Mary Veronica Santiago-Monteverde, the appellant in the case, who filed for bankruptcy in 2011 after falling behind on payments following her husband’s death. She pays $703 a month for a two-bedroom Apartment On East 7th Street, where she has lived since 1963, according to the Post. She owes $23,000, most of which is credit card debt.
Landlord JVG Management has agreed to pay Santiago-Monteverde’s debt and let her keep the apartment, where she lives with her son, for the rest of her life. In return, the landlord regained control of the lease, the newspaper reported.