Clinton Township, MI asked in Bankruptcy, Contracts and Health Care Law for Michigan

Q: When a continuing Care Facility files Chapter 11 does it void the contract which includes return of part of entrance fee

My cousin recently left a continuing care facility that filed chapter 11 two weeks later. Per her contract she gave 60 days notice but moved out in 20. Is she obligated to pay for the remaining 40 days since she probably wont be getting the 90% of her entrance fee back that was promised in her contract?

1 Lawyer Answer
Brent T. Geers
Brent T. Geers
Answered
  • Bankruptcy Lawyer
  • Grand Rapids, MI
  • Licensed in Michigan

A: A bankruptcy alone does not void a contract. Chapter 11 is a business reorganization. Essentially someone - a trustee - takes over the business, managing its assets and liabilities. Largely, that process does not affect you the consumer.

Think about it: you have likely bought products or otherwise done business with a company going through bankruptcy already and you probably didn't even know it.

Timothy Denison agrees with this answer

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.