When people consider bankruptcy in Tampa, they often think about how it will affect their mortgage and homeownership, but not everyone who files for bankruptcy owns a home. Renters file for bankruptcy all the time and many are concerned about how their filing will affect their living arrangements. What do you need to know if you are renting your home and you file for bankruptcy?
As long as your rent payments are up-to-date, bankruptcy will have very little effect on your living situation. Your landlord is concerned about whether he or she receives your rent payment on time, and whether or not you are keeping your space well-maintained and following the rules of the rental. As long as you are a good tenant, your landlord likely has little concern for your bankruptcy, aside from whether it will affect your ability to pay rent in the future. You are under no obligation to tell your current landlord you’ve filed for bankruptcy, but some renters do so to put their landlord’s mind at ease about rental payments.
What If You Aren’t Up-to-Date on Rental Payments?
There was a time when filing for bankruptcy could stop your landlord from evicting you. The automatic stay that prevents creditors from contacting you and stops foreclosure proceedings also affected landlords. As of 2005 when the Bankruptcy Abuse Prevention and Consumer Protection Act went into effect, this is no longer the case. The automatic stay does not prevent landlords from evicting tenants, as long as the landlord has a judgement prior to your filing. Essentially, if you are in the process of being evicted and you decide to file for bankruptcy, your filing isn’t going to help you all that much when it comes to preventing the eviction.
You can see all of the details of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 Congress.gov.
There are exceptions, and if you are able to catch up on your rent payments, you might receive some protection from the bankruptcy court. The rules about bringing your rental payment up-to-date are strict and you are given only 30 days to do so, and even then it’s up to the court whether or not you will be given the opportunity to stay in your rental. Evictions are decided on a case-by-case basis, so you should never assume you are going to be able to stay, even if you work to bring your payments current.
How Bankruptcy Can Help Renters
The bottom line is there is very little support or protection offered to renters filing for bankruptcy in terms of their living arrangements. You are essentially on your own and responsible for making rent payments, so you can stay in good standing with your landlord. Bankruptcy can make paying your rent easier, of course, because it frees up money to put toward rent. If you are struggling to pay rent and bankruptcy is your next step, you will enjoy some relief knowing the money will soon be available to pay rent. However, if you have already fallen behind on rental payments, it might be too late to protect your current living situation.
If you are a renter considering bankruptcy or you have concerns about your living arrangements after you file for bankruptcy, we can help. Contact the Law Offices of Robert M. Geller at 813.254.5696 to discuss your situation.