CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Can Debt Related to Rent Payments Be Discharged?

Housing is a major concern in bankruptcy, and frequently, the focus is on foreclosure and how bankruptcy protects you from losing your home.

But what if you rent?

How does bankruptcy affect renting and what if you’ve fallen behind in your rent and you’re concerned about eviction?

In most cases, you won’t be evicted if you are just a month behind on your rent. Some landlords even allow you to stay in your home if you’re a few months behind. Some of this is based on communication with the landlord, while other times there is a specific policy in place – usually the case when you’re renting from a larger company.

For the sake of explanation, we’ll assume you’ve fallen behind on your rent and you’re dealing with at least a few other debts that are behind. You’ve reached the point where you’re considering bankruptcy, but you’re unsure what will happen to your rent debt if you file. And you’re also wondering if you can be evicted if you file.

Here’s what you need to know:

Chapter 7 and Rental Debt

As a renter, you might be more likely to file for Chapter 7 than Chapter 13 because you’re not trying to protect an asset. This isn’t always the case – there are plenty of renters with high-value assets – but since most people’s greatest asset is their home, renting makes it less likely you’ll need to file for Chapter 13.

In Chapter 7 bankruptcy, the trustee liquidates your assets and uses the proceeds to pay your creditors. If you’ve accumulated rental debt, the money collected by the trustee could be used to pay past due rental payments. And if there is no money or the trustee has prioritized your debt in such a way that there’s nothing left for past due rent, that debt can be discharged.

However, this doesn’t mean you’ll be current on your lease and able to continue living in your rental.

Instead, the trustee, not your landlord, assumes the lease, and decides what happens next. You might be given a window of time to repay the rent in arrears. Then, as long as you continue to make rent payments on time, your bankruptcy’s automatic stay will protect you from eviction.

Your trustee also has the option of rejecting the lease, which means you aren’t obligated to continue rent payments. Past due rent is discharged in the bankruptcy, but you’re at risk for being evicted. Your landlord has the option of filing for a Motion of Relief to evict you, and the automatic stay will not protect you from this legal action.

Chapter 13 and Bankruptcy

If you decide Chapter 13 is the better option for you, you’ll be given two options regarding your living arrangements and past due rent. You can remain in the lease and repay rental payments in arrears in your repayment plan or you can reject the lease and move out of the rental.

Keep in mind, if you choose to remain in the lease, you’ll need to pay past due rent, and continue to keep payments current. Otherwise, your landlord will have the option of petitioning the court for relief from the automatic stay, which will allow eviction actions to move forward.

To learn more about what “arrears” means and how it applies to debt, check out this page from Investopedia.com.

What You Can Do If You’re Being Threatened with Eviction

Filing for bankruptcy could protect you from eviction, even if eviction proceedings have already begun. However, timing plays an important role and the court has the option of ruling the lease terminated and forcing you to move.

If you’re nearing eviction, but there’s no final order issued yet, the automatic stay of bankruptcy could protect you.

It’s important to keep in mind that, like bankruptcy, eviction is a legal process. Your landlord cannot just decide to evict you and toss you out on the street on a whim. He or she must go to court and get permission to evict you, which gives you some time to act.

If you’re concerned about eviction or you’ve been threatened with an eviction notice, bankruptcy might help. For more information or to discuss your situation, contact the Law Offices of Robert M. Geller at 813.254.5696 to schedule a free consultation.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

How Does Getting Married Affect Bankruptcy?

If you are considering bankruptcy, you may be wondering how getting married affects your ability to file. The answer is...
Read More

How Does Filing for Bankruptcy Affect a Vehicle Loan?

If you're considering bankruptcy, you may be wondering if you'll be able to keep your car. The answer depends on...
Read More

8 Ways to Deal with Student Loan Debt

If you're one of the millions of Americans saddled with student loan debt, you're probably looking for ways to minimize...
Read More

Tips for Handling Credit Card Debt

If you're struggling with credit card debt, you're not alone. The average American household owes nearly $6000 in credit card...
Read More

Don’t Fall for These Common Bankruptcy Myths

There are a lot of misconceptions out there about bankruptcy. Working with a debt defense attorney is one of the...
Read More

Can Filing for Bankruptcy Affect My Career?

It’s common for people considering bankruptcy to wonder how filing affects their job. The answer to this question depends on...
Read More

Can I Fix My Credit After Bankruptcy?

Wondering how to improve credit after bankruptcy? Here's what you need to know. Bankruptcy can be a fresh start for...
Read More

What Happens If I Can’t Afford Chapter 13 Bankruptcy?

Are you wondering what happens if I can’t afford my chapter 13 payments? Here's what you need to know when...
Read More

Help I Regret Filing for Chapter 7 Bankruptcy

Bankruptcy isn't the right choice for everyone. Depending on your unique financial situation, you may be able to find other...
Read More

How a Bankruptcy Attorney Helps You Avoid Problems When Filing

Do you know what mistakes to avoid when filing for bankruptcy? If you're considering filing for bankruptcy, it's important to...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions