Many people who are struggling to pay their rent are often stressed and worried about being evicted. If you’re thinking about filing for bankruptcy because you are behind on rent, then you have come to the right place . One type of bankruptcy that most people believe is not dischargeable is back rent. However, this rent is able to be discharged in a bankruptcy because it is an unsecured debt. This article will discuss how your back rent can be discharged through the bankruptcy process.
Renting an apartment in New York and New Jersey can be extremely costly. Unfortunately, with the coronavirus, many individual’s are having issues paying their rent. As of right now, the government has extended a moratorium on evictions but when this is lifted, thousands of people will owe back rent and be evicted if they can’t pay it.
If you have found yourself in default on your lease agreement, bankruptcy can help you get back on your feet and start over. In bankruptcy back rent is treated like an unsecured debt. This means that it is treated just like you medical bills, credit card debts, and personal loans. When you file your bankruptcy petition it will ask you if you are behind on rent. If you are behind on rent, you will need to list the name of your landlord on your bankruptcy schedules. Your landlord will be notified of the bankruptcy filing and will have to cease all collection efforts.
What Happens If I am in the Middle of Being Evicted?
If your landlord has filed an eviction action against you, then bankruptcy might be the right choice for you. Although, bankruptcy may not allow you to stay in the apartment. It can delay the eviction process for you. Once you file for bankruptcy an automatic stay will go into place. The automatic stay stops creditors, including landlords, from collecting any debts that are owed.
It is important to note that if a landlord files a motion to be relieved from the automatic stay, they will be able to continue to collect the rent against you. Generally, with the automatic stay in place, you can by yourself 3-4 extra months of staying in the apartment as long as your landlord doesn’t file a motion to lift the automatic stay.
What if I want to break My Lease Early and File For Bankruptcy?
Bankruptcy can allow you to break your lease early. In bankruptcy, you can reject an executory contract when you file for bankruptcy. This means that you can. break the lease and no longer remain liable for the rental payments. Keep in mind, that when you break the lease, it will allow a landlord to start an eviction against you. Thus, you may want to file for bankruptcy quickly so that you can get any back rent discharged.
Does Filing For Bankruptcy Remove an Eviction?
Unfortunately, no. If you have already been evicted because you were not able to pay your rent, it will stay on your credit report. Many people have a misconception that filing for bankruptcy will remove an eviction from a credit report. Filing for bankruptcy can discharge any past-due rent you owe. This means that if an old landlord is suing you, you can file for bankruptcy to discharge the debt. This doesn’t mean that these negative marks will come off your credit report.
Does Filing For Bankruptcy and Not paying My Rent Make My Credit Report Worse When Future Landlords See This?
No. If you have not paid your rent, then bankruptcy will not make it worst for you. Bankruptcy laws were enacted to help people get a fresh start. If you try and apply to an apartment owing an outstanding amount of rent and having judgments on you, then it is far more likely that you will be denied.
Bankruptcy can help an individual start over fresh so that they can re rent an apartment with no issues. Generally, a person can have perfect credit within two years as long as they take all the proper steps to rebuild their credit scores.
Can I Discharge Damage to an Apartment in Bankruptcy?
Probably not. If you intentionally damaged property within your lease, the bankruptcy court will likely not discharge this outstanding debt. Bankruptcy laws don’t allow people to discharge debts caused by willful and malicious injury. If an individual intentionally causes property damages then it is unlikely it would be dischargeable.
Can I rent an Apartment After Filing Bankruptcy?
When individuals file for bankruptcy it will stay on you credit report for 7-10 years. Many people are concerned with how future landlord’s will consider a bankruptcy on their credit report. They also are scared that if they file for bankruptcy, they won’t have a place to live. Fortunately, most people will qualify for a new rental within three months of getting their bankruptcy discharge. To do this, an individual will need to make sure that they take all proper steps to start rebuilding their credit after their bankruptcy. This means that they should:
- Make timely payments to all outstanding debts.
- Pay off their debt in full each month.
- Don’t take out new debt.
- Only use a small portion of available credit on any new credit cards.
How Do I Rent an Apartment After Filing For Bankruptcy?
Leasing an apartment after filing for bankruptcy can be a way to begin reestablishing your credit. If an individual is worried that they won’t qualify for a rental due to their history of bankruptcy then there are some steps that should be taken:
- Be open and honest with the new landlord. Individual’s who are worried about the bankruptcy on their credit report should be upfront with their filing. They can let their landlord know that they have a history of bankruptcy and explain what caused their financial downfall. It is important to show the landlord that now they are financially able to make timely payments and why they are now in a good financial position to do so. It is important that the individual can show proof of employment, proof of timely made payments to any car loans after the bankruptcy, and perhaps a larger security deposit.
- Individual’s should try to rent from private landlords rather than big corporations. Generally, big corporations tend to be more strict when it comes to their rental guidelines. Renting from a smaller apartment complex can give individuals who have filed for bankruptcy a greater chance of being approved.
If you are thinking about filing for bankruptcy because you are behind on rent, it is a good idea to speak with an attorney. Karra L. Kingston Esq. has helped many people who have not been able to pay their rent, discharge the debt through a bankruptcy proceeding. Karra L. Kingston Esq. will walk you through the bankruptcy process to ens
ure that you understand all the rights you have available to you against your landlord.