Discharge Rent Eviction Debt in Bankruptcy; Stop Residential Evictions
AGONIZING HORROR OF FACING RESIDENTIAL RENT EVICTION:
This blog pertains to residential tenant evictions, not commercial.
IS PAST DUE RENT AND EVICTIONS DISCHARGED IN BANKRUPTCY?
Past due rent owed before the filing date is all discharged. And any rent due pursuant to the contract is discharged even if you stay after the filing date, unless you continue to occupy after a writ of restitution is issued as discussed below. Thus, all past due rent is discharged. Some persons ask “Can I include rent debt in bankruptcy”. The answer is simple: All debt must be listed in any bankruptcy no matter what it is or a person is committing perjury if intentionally omitted. And the past due rent is discharged in Chapter 7 absent fraud or some rare exception to the Bankruptcy Code (I have not see that ever in my 8,600 persons I have helped filed in last 34 years).
IS LANDLORD REQUIRED TO LET YOU STAY IF YOU PAY FUTURE RENT? NO
The past due rent is dischargeable. The landlord cannot legally ask you to pay back past due rent as part of negotiations to keep living there if the landlord knows you filed bankruptcy. All debtor’s must also list all debts and all present leases and therefore the Landlords will know you filed as legally they will be receiving notice thereof. But you can offer to stay and pay future rent, maybe offering a higher monthly rate, for the future to see if the Landlord will agree. Offer more money and note to the landlord they will save attorney fees, cleanup costs, etc. if they enter into a new rental contract ; remember, they cannot ask you to pay any portion of the rent owed before the filing date.
What about State Eviction Moratorium or “Bridge” policies?
I help persons who are not able to reach an agreement with landlords and decide to file bankruptcy and discharge all that old huge past due rent. If you want to try and determine if you can reach an agreement with a landlord under possible “bridge” polices then I strongly suggest you contact the following : https://nwjustice.org/home Most State eviction moratoriums have passed although now “bridge” policies may be an option depending on local rules too. If that does not work, then call a law firm to discuss filing bankruptcy to discharge all the debt instead of trying to pay back all of it. Many counties have rent assistance and mediation programs in place also you might check out.
ILLEGAL EVICTION AFTER FILING BANKRUPTCY?
Will filing bankruptcy stop an eviction? Do not believe reading somewhere that filing a bankruptcy stops all evictions as that is not true. It depends is the real answer. Why? Because the “stay” of the bankruptcy filing does NOT apply to the continuation of any eviction for which the lessor has obtained before the bankruptcy petition filing date, a judgment for possession of such property..” Some exceptions exist. Section 362(b)(22). Thus, if a writ of restitution was already ordered by a court on a residential lease then legally the landlord can proceed to evict. Why do you care? Because then you are also unlawfully detaining the property and the time you occupy after your bankruptcy is filed can result in be a judgment for damages issued against you that is not discharged in bankruptcy.
Will a landlord obtain a Court Order for Relief from Stay anyway? Many landlords being careful as their attorneys do not read the Bankruptcy Code carefully still file to obtain a Court Order for Relief from Stay anyway. In my view, that is great as it can allow you to live there longer, but also possibly lead to post filing larger past due rent you may be ordered to pay.
Save thousands of dollars possibly as follows: If you file before a Court ordered writ of restitution, the stay then does apply. Then, the landlord must obtain relief from stay to in fact proceed with eviction. Why do you care? Because the contract itself is still discharged in bankruptcy so if you live there for a month or two before the landlord obtains a writ of restitution, and move out before a writ is later issued, you will not owe legally for any of your occupancy even post bankruptcy. Why? Because the contract itself is discharged and you are not unlawfully detaining the property. Thus, tenants must determine should I file bankruptcy before the writ of restitution or not?
There are Devastating Reasons to file or wait before filing in any case and only a
discussion with an experienced Bankruptcy Attorney can determine the answer to that question. Call Bankruptcy Attorney Richard D. Granvold for a free consultation now for that discussion.
YOU CANNOT FORCE LANDLORD TO ACCEPT BACK RENT IN CHAPTER 7 OVER TIME:
In a chapter 13 , if you file bankruptcy before a writ of restitution is issued, you can file a plan to include curing all the past due rent over the term of the plan. Should you? In my view, in most cases NO. Why? Because most persons filing chapter 13 pay merely cents on the dollar, or $125 or so a month assuming no secured or non-dischargeable type debt. Why not just save the money on paying past due and move somewhere else? Or reach a new agreement on future rent and enter a new contract to pay slightly higher amount to continue living there but discharging all past due? The landlord may then save attorney fees, eviction and cleanup fees, and just collect rent from you for the future. You can try to do that but it takes both of you to agree and an attorney can help discuss that too for you .
No. Once you file for bankruptcy, any legal proceedings that are already in progress against you, such as a notice of eviction or a lawsuit, must be stopped. If you have declared bankruptcy and have not yet been discharged from it, your landlord cannot begin eviction procedures against you
Credit report Reflections:
Terrifying Credit Reports Affect on Future Rentals and What to do:
If you in fact have to be evicted, the actual filing of bankruptcy will not remove your eviction from your credit report. Evictions can stay on a credit report for up to seven years. And if a lawsuit is filed to evict, that can be reported also on public records. Do you care? Depends. Some landlords see a prior bankruptcy and don’t want to rent to you. Many landlords though go by your credit scores. Others want to see the money: prepaying 2 to 6 months rent may cause a landlord to not care if you were previously evicted. It comes down to what the potential landlord requires in order to allow you to move in.
You might also avoid the actual eviction by both moving out and advising the landlord you have “VACATED and ABANDONED” the residence. Merely moving out does not mean your tenancy ended. But notifying the landlord, turning in the keys, and advising you have now abandoned the residence and that the landlord has the right to enter could in fact lead to no eviction ever showing up on a credit report. Rather, if the landlord wants to sue you they can but it is for past due rent , not an eviction and as such that may help you obtain rent in the future.
Renter Blacklisted? In addition to credit reports, many landlords hire companies to perform background checks that are more extensive than a credit report. Background checks can uncover information about criminal history, including sex offender status.
Some companies, including the major credit bureaus, offer “renters screening reports,” often called blacklists, of people whose names appear in the records of housing courts nationwide
Legal Disclaimer: This answer does not constitute legal advice. I am admitted in the State of Washington only and make no attempt to opine on matters of law that are not relevant to Washington. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship. Call an attorney now if legal help needed.