When you’re deep in debt, every financial obligation becomes a pain point. Bankruptcy provides a way out, a chance to start fresh and escape the bills and debt collectors that keep popping up like mushrooms. Still, eliminating your debts doesn’t mean that you won’t have future expenses. Your living expenses will continue, including any rent that you’ve agreed to pay. Here is what you will need to know about how filing for bankruptcy will (and will not) impact your leased housing situation.

If you are currently renting an apartment or house, are current in your payments and plan to continue living there and paying for it, your bankruptcy will not have any impact on your lease or your ability to remain. That being said, because Schedule G of your bankruptcy petition asks you to list any “unexpired leases and executory contracts,” you will have to include your landlord’s name and contact information. The court will send your landlord notification of your filing, so it may be smart to let them know that you’ve filed but that it won’t impact your existing relationship with them.

If, on the other hand, you are behind on your lease and you want to get out of it, your rental obligation will need to be entered on both Schedule G and on Schedule E/F, where you list debts.  If you do this and you want to exit your apartment and lease, your bankruptcy filing will allow you to do so – but it will not allow you to continue living there rent-free after you’ve filed. If you stay in the apartment after filing you are incurring a post-petition obligation that is not included in your petition, and will not be discharged.

Many renters worry that their landlord will evict them once they hear about their bankruptcy out of fear that their rent will not be paid. If you are behind on your payments and included those debts on your petition, then the automatic stay will keep you from being evicted, but only for a while. You will have to catch up on your back pay if you want to stay or keep from being evicted. If you want to leave, you will have some time, as your landlord will need to petition the court for the automatic stay to be lifted so that they can evict you. Note that if the landlord had already filed an eviction notice against you before your filing, things get trickier.

If you need more information about how filing for bankruptcy will impact your ability to continue living in your leased housing, we can help. Contact us today to set up at time to chat.

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