A common scenario in the cases of individual bankruptcy filings is the surplus amount of back rents that the debtor has. It amounts to a large value that at times the debtor is on the verge of eviction by his landlord because of the past dues. Having arrears with your rent may seem a threat and the question about how easily these back rents can be discharged is a constant thought in the minds of the debtor. Do not worry! Rent arrears are also your unsecured debts, similar to your medical bills and credit card payments that can be due. Hence when filing for bankruptcy, you need to disclose the back rents just as you would do your other unsecured debts. The probability of getting these rent arrears discharged are high but there are some exceptions in that case too.
Not paying the rent will bring about eviction actions against the debtor but when he files for bankruptcy individually, he can achieve a stay on his eviction by the landlord and also stop further collection of rents. The options that the debtor has can vary if you are filing a Chapter 7 or Chapter 13 bankruptcy. So talk to a bankruptcy attorney who can guide you at the right juncture before you land yourself into a situation of eviction.
A consulting firm, such as Bankruptcy Relief Center, can co-work with the debtors to undertake the filing of bankruptcy in the situation of high rent arrears. Remember that it needs to be done before the court issues a write of eviction, else as a debtor, you may not be granted the automatic stay on the need to eviction. The court, in that case, will assume that the eviction process has been completed and hence will insist that the debtor vacate the apartment. So know the various options that are available for the debtors in both the bankruptcy chapters, Chapter 7 and Chapter 13.
Chapter 7 bankruptcy options for rent arrears
In the scenario of filing for Chapter 7 bankruptcy, the trustee usually takes control of the case at hand. They determine whether to reject the lease or assume the lease involved. In case that the trustee rejects the lease, then the landlord can proceed to evict the debtor. The trustee can also choose to assume the lease, in cases of which, the debtor gets a 30-day time period to settle his past rent dues from the date of filing bankruptcy. The payment of this past due has to be done at the court handling the eviction and then the debtor can proceed to make monthly payments henceforth. The automatic stay on the eviction will continue to remain in place till the bankruptcy is over.
Chapter 13 bankruptcy options for rent arrears
Chapter 13 bankruptcy is opted by the debtor when the income of the debtor surpasses the maximum allowable income (which is the threshold of Chapter 7 bankruptcy). Chapter 13 bankruptcy allows the debtor to reorganize his financial status using a repayment plan that spans from three to five years. Hence the rent arrears that is present in Chapter 13 bankruptcy is well within the debtor’s control. As a debtor, you are entitled to make the decision of assuming or rejecting a lease.
If you decide to keep the apartment, then the rent dues become part of your repayment plan. Remember that the current rent also needs to be paid on time since you will continue to occupy the apartment. Do not miss any of the committed payments, else the landlord will be able to petition the case of missing payments and obtain relief from the automatic stay. It can then lead to eviction of the debtor from the current home.
Now that the options are laid out clearly in front of you, choose the bankruptcy type as appropriate. A bank attorney in Los Angeles or Dallas can work with you from Bankruptcy Relief Center and guide you as needed.