Breaking will be offline for scheduled maintenance Saturday July 24 5 AM US EST to 8:30 AM EST. We apologize for the inconvenience.


Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the multifamily market, click here.)

WASHINGTON, DC-The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, signed into law by President Bush on April 20, goes into effect today, changing the rules for bankruptcy protection filers who would otherwise have had most of their debts eliminated. The new legislation contains provisions that will spare mortgage lenders and multifamily property owners from suffering great financial losses due to the eradication of filers’ debts.

Under the previous guidelines of the law, multifamily property residents who filed for bankruptcy under Chapter 7 were allowed to remain in their rental apartments without paying rent for several months. New provisions, however, have closed that loophole, forcing those wishing to file for Chapter 7 to file for Chapter 13 where they will be required to pay many of their debts under a repayment plan.

Additionally, previous regulations left commercial/multifamily lenders holding the bag, as well, due to a $4 million cap on single asset real estate bankruptcies in which Chapter 11 filers could halt the foreclosure process.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.