Being in debt is stressful, but things can get really intense when you start to struggle to keep up with your basic expenses, such as rent. Making a late payment here and there may be ok, but some landlords are quick to move toward the eviction process. If you’re renting and considering bankruptcy, it’s best to work with a professional who can guide you.
Evictions & the Automatic Stay in Bankruptcy
Filing bankruptcy will not only help to discharge your unsecured debts, but it will also trigger the automatic stay. This gives you immediate relief from some debt payments. The automatic stay also puts a stop to any eviction proceedings.
If you don’t want to move, you’ll need to work with your landlord to get caught up on your rent. Your landlord could file for relief from the automatic stay, and at that point, you’ll need to get caught up or face eviction.
While it’s never wise to rush into bankruptcy, it can also be damaging to put off filing too long. If you are served with eviction papers and then decide to file bankruptcy, the automatic stay will not apply to your rent.
If you do find yourself in this situation, please call me to explore some options. You may be able to make your back rent payments to a court clerk if you can set up this plan and are up to date on payments within 30 days of filing bankruptcy.
Making a New Start
You do have choices about the outcome of your financial situation. After taking a realistic view of your income and budget, you may decide that your current rent is just unreasonable for you. Filing bankruptcy could end your lease and allow you to move to a more affordable place. ou may prioritize the stability of staying in your current rental and choose to cut corners elsewhere. Ultimately, the court trustee will be the one who determines if the amount of rent you’re paying is reasonable for your circumstances.
You may also prioritize the stability of staying in your current rental and choose to cut corners elsewhere. Ultimately, the court trustee will be the one who determines if the amount of rent you’re paying is reasonable for your circumstances.
If the court trustee could end your lease if they determine that your rent is too expensive. This decision will be based on your income and expenses, and you’re filing a Chapter 7. This would result in an eviction on your credit report, which can make it more difficult to find a new rental.
If your rent is determined to be reasonable, you’ll be able to stay in your current home. The landlord may ask you to provide proof that you’re able to keep up with rent payments.
If you’re filing a Chapter 13, it is solely up to you if you want to continue in your current lease. If you do decide to stay, your landlord could ask that your rent is taken directly from your paycheck as a wage garnishment.
Get Advice First
Before making any important financial decision, it’s a good idea to seek guidance from a professional who can guide you, while keeping in mind any time-sensitive aspects of your situation. By being proactive, you can reduce your chances of eviction, so if you’re uncertain what to do next, give me a call.