When a commercial tenant files bankruptcy, the property management team acting for the landlord has to change how it treats that tenant the same day. Pause collection of amounts owed before the filing, and any enforcement action. Split the tenant's ledger at the filing date. Keep billing rent that comes due after the filing. Work with bankruptcy counsel on the claim for what was owed before it. Then track the deadline for deciding the lease's future.

For example: the notice arrived on a Tuesday afternoon, an email from a law firm with a case number attached. The tenant was a regional retailer, one of dozens of commercial tenants across the portfolio the team manages. It had filed Chapter 11 that morning.

On Wednesday at 8 a.m., the collections workflow sent that tenant its usual past-due reminder. A late fee posted overnight. And the lease administrator, who hadn't seen the email, was drafting a notice of default.

Nothing the team did was unusual. Every step was part of the normal process. From the moment of filing, some of those steps were a problem.

That's what makes a tenant bankruptcy different from an ordinary default. The team doesn't need a new process for chasing rent. It needs to stop parts of the old one, fast.

What changes the moment the tenant files?

Much of what the collections process does.

When the case begins, an automatic stay takes effect under section 362(a) of the Bankruptcy Code. Without relief from that stay, a landlord generally can't take any action to collect on a claim from before the filing. That includes starting or continuing an eviction, or chasing unpaid rent. Even sending a lease termination notice after the filing date will normally violate the stay.

The deposit is frozen too. A landlord holding a cash security deposit generally can't apply it against its claims without relief from the stay, or unless the tenant's Chapter 11 plan allows it.

In practice, that means pausing these for the tenant in bankruptcy:

• automated past-due reminders and dunning emails for amounts owed before the filing

• late fees on amounts owed before the filing

• notices of default or termination

• eviction filings, or steps in one already under way

• applying the security deposit to the balance

There are narrow exceptions. The stay doesn't protect a nonresidential lease that had already expired at the end of its stated term before the filing. Whether an exception applies is a question for counsel, not the site team.

The before-and-after split

Every decision in a tenant bankruptcy starts with one question: was this amount owed before the filing, or after it? That's the framework the whole team works from.

The after-the-filing column matters more than teams expect. Until the lease is assumed or rejected, the tenant must timely perform all its obligations under a nonresidential lease that arise after the filing. The court can extend the time to pay obligations that fall in the first 60 days, but not beyond that 60-day period.

So a bankrupt tenant still owes this month's rent, and you keep billing it. What changes is what happens if it isn't paid: the next step goes through counsel and the court, not the usual collections escalation.

One edge case: courts differ on how to treat rent for the month in which the filing happens. Keep that month separate on the ledger and let counsel decide how to claim it.

The first-week checklist

1. Pause collections on this tenant's pre-filing balance. Stop reminders, late fees and notices on amounts owed before the filing, and do it before the next automated run, not after.

2. Split the ledger at the filing date. Keep every open charge dated before the filing separate from charges after it. Don't write anything off yet. The balance before the filing is a claim, not a loss.

3. Confirm the case details. Record:

• the court and case number

• the chapter filed

• the exact name of the debtor

Check that the debtor is the same legal entity as the tenant on your lease. If a guarantor or parent company filed instead of the tenant, the rules can be different.

4. Bring in bankruptcy counsel. The timelines below are short, and some mistakes can't be undone.

5. Calendar the deadlines. Record each one against the lease, with an owner. The next section lists them.

6. Keep billing rent due after the filing. Invoice on the normal schedule and track payment closely. If the tenant stops paying, counsel can ask the court to compel payment, or to force a decision on the lease.

7. Leave the security alone until counsel advises. A cash deposit is frozen by the stay. A letter of credit or bank guarantee is often treated differently. RIOO's guide to bank guarantees in commercial leases notes that a bank guarantee is generally better protected than a cash deposit held by the landlord when a tenant goes bankrupt. Whether and when to draw on it is still a question for counsel.

Which deadlines matter?

Proof of claim. File a claim by the deadline, known as the "bar date." A landlord that files late, or doesn't file at all, may be barred from recovering what it was owed before the filing. In no-asset Chapter 7 cases, creditors may be told not to file a claim unless assets turn up later, so follow the notices in the case.

The lease decision. This deadline applies in Chapter 7, 11, 12 and 13 cases alike. Within it, the debtor or trustee has three options:

• keep the lease (known as "assuming" it)

• keep it and transfer it to someone else ("assuming and assigning" it)

• reject it

If the deadline passes without a decision, the lease is treated as rejected and the tenant must surrender the premises immediately. After the one 90-day extension, any further extension needs the landlord's written consent each time.

That consent is real leverage. It's a decision for the owner and counsel, so make sure the asset manager knows the date is coming.

What happens to the lease?

If the lease is assumed, the tenant generally has to cure existing defaults, which means paying what's owed, and give adequate assurance that it can perform in the future. The lease then continues.

If the lease is rejected, the space comes back, and the landlord's claim for future rent is capped. The cap is the greater of one year's rent, or 15% of the remaining term, up to three years. Separately, the landlord keeps a claim for unpaid rent due before the filing or the surrender, whichever came first.

Courts disagree on how to calculate the 15%:

• The time approach: rent for the first 15% of the remaining term.

• The rent approach: 15% of all the rent left on the lease.

On a long lease the difference can be large, so let counsel run both calculations.

What if a rejection is likely? Start re-leasing work early, and review the unamortized incentives on the lease. RIOO's guide to early lease terminations covers the balances that have to be dealt with when a lease ends early.

Who owns each step?

The step most likely to fail is the first one. Automated collections don't know a tenant has filed, so someone has to tell the system the same day.

What should the asset manager watch?

A bankruptcy filing may come with warning signs, such as:

• slower payment

• requests for rent relief

• store closures elsewhere in the tenant's portfolio

Three things decide how exposed a property is when it happens:

• Concentration. How much of the building's income depends on this one tenant?

• Security. Is it a cash deposit, frozen by the stay, or a letter of credit or bank guarantee? RIOO's guide to lease guarantee types covers the options.

• Lease economics. Is the rent above or below market? That tells you whether you'd rather the lease is assumed or rejected.

And one control question for the day a notice arrives: can the team show, within 24 hours, that collections on the pre-filing balance are paused, the ledger is split at the filing date, and both deadlines are calendared with an owner? If any of those depends on someone happening to see an email, the process has a gap.

Where RIOO fits

RIOO is property management software built directly on NetSuite.

• Commercial leases on one platform. RIOO is built for residential, commercial and mixed use portfolios.  The lease, the charges and the tenant's financial record sit in one system.

• Evidence on every charge. RIOO's tenant ledger supports transaction-level documentation. Managers can attach evidence and notes to individual charges, which gives counsel a clear record of what was billed, and when, for the claim.

Note: This blog is operational guidance, not legal or accounting advice. It describes the US Bankruptcy Code as checked in September 2026. Bankruptcy outcomes depend on the chapter filed, the court and the facts. Engage bankruptcy counsel as soon as a filing notice arrives.

Frequently asked questions

Q1. Can a landlord evict a commercial tenant who has filed bankruptcy?
Generally not without relief from the automatic stay. The stay stops landlords from starting or continuing an eviction, or collecting rent owed before the filing, unless the bankruptcy court grants relief.

Q2. Does a bankrupt commercial tenant still have to pay rent?
Yes, for rent that comes due after the filing. Under section 365(d)(3), the tenant must timely perform its lease obligations arising after the filing until the lease is assumed or rejected.

Q3. What happens to rent the tenant owed before the filing?
It becomes a claim in the bankruptcy case. The landlord recovers it, if at all, by filing a proof of claim by the deadline.

Q4. What is the deadline to file a proof of claim?
In voluntary Chapter 7, 12 and 13 cases, it's generally 70 days after the filing. In Chapter 11, the court sets a "bar date." Missing it can bar recovery of the claim.

Q5. How long does the debtor have to decide whether to keep the lease?
The debtor or trustee must assume or reject it by the earlier of 120 days after the filing, or confirmation of a plan. The court can extend that once by 90 days for cause. Any further extension needs the landlord's written consent.

Q6. Can the landlord use the security deposit?
Not without relief from the stay, or unless the tenant's Chapter 11 plan allows it. Letters of credit and bank guarantees are often treated differently, but take counsel's advice before drawing on one.

Q7. What can a landlord claim if the lease is rejected?
Unpaid rent due before the filing, plus future rent capped at the greater of one year's rent or 15% of the remaining term, up to three years. Courts differ on how the 15% is calculated.

Q8. Should we write off the balance owed before the filing?
Not at the filing date. That balance is a claim in the case, not yet a loss. Keep it separate on the ledger, and let the claim outcome and your accounting policy decide what gets written off, and when.