Falling behind on rent can be incredibly stressful, especially if you’re facing eviction. If you’re considering filing for Chapter 7 bankruptcy in Kansas or Missouri, it’s important to understand how this decision might impact your situation with late rent payments. This guide breaks down what happens, the risks involved, and how bankruptcy may help you.
Late Rent and the Eviction Process
What Happens When You’re Late on Rent?
If you’re behind on your rent:
- Landlord Actions: Your landlord can begin the eviction process by taking you to court.
- Potential Judgments: If the court rules in favor of the landlord, you could face:
- Eviction from your apartment or home.
- A judgment for unpaid rent, late fees, court costs, and other penalties related to breaking your lease.
How Chapter 7 Bankruptcy Can Help
Filing for Chapter 7 bankruptcy may offer some relief depending on your situation. Let’s explore two possible scenarios:
1. If Your Landlord Already Has a Judgment
- Discharge of Debt: Chapter 7 can discharge judgments for unpaid rent, fees, and penalties related to breaking your lease.
- Moving Forward: After discharge, you’re free to move without the burden of past-due rent following you.
2. If There’s No Judgment Yet
If your landlord hasn’t obtained a judgment:
- The Automatic Stay: Filing for bankruptcy triggers an automatic stay, temporarily halting:
- Eviction proceedings.
- New lawsuits from your landlord.
- Conditions to Stay in Your Apartment:
- The court will require a deposit for rent payments during the bankruptcy case.
- Your landlord can file a motion to lift the automatic stay, especially if they want to proceed with eviction.
While the automatic stay provides breathing room, it doesn’t guarantee you can remain in your apartment long-term. Many times for the Chapter 7 bankruptcy process to help you stay in the residence you will need to have access to a lump sum of funds and this is usually possible for our clients.
Understanding Pre-Petition vs. Post-Petition Debt
What Is Pre-Petition Debt?
Pre-petition debt includes any rent or fees you owe before filing for bankruptcy. These debts are typically eligible for discharge under Chapter 7.
What About Post-Petition Debt?
After filing, you’re still responsible for any rent or charges incurred while continuing to live in your apartment. It’s essential to have a plan for managing these expenses during and after your bankruptcy case.
What Happens After Bankruptcy?
Once your bankruptcy case is closed:
- Lease Status: Your lease is effectively terminated, regardless of whether it was month-to-month or a long-term agreement.
- Landlord’s Choice: Your landlord can decide whether they want to work with you moving forward. In many cases, it may make more sense to use your financial fresh start to find a new place to live.
Tips for Handling Rent and Bankruptcy
- Understand Your Landlord’s Position: Open communication with your landlord may give you insight into their plans.
- Have a Backup Plan: Be prepared to find alternative housing if staying in your current apartment isn’t an option.
- Work with a Bankruptcy Attorney: An experienced attorney can help you navigate these issues and determine the best course of action for your situation.
Questions to Consider
- Have you reviewed your lease and discussed options with your landlord?
- Are you prepared to pay post-petition rent if you remain in your apartment during bankruptcy?
- Can you pay over a deposit for rent to the court after your Chapter 7 case is filed?
- Do you have a plan for housing after your bankruptcy case is discharged?
Take Control of Your Situation Today
Filing for Chapter 7 bankruptcy while late on rent involves unique challenges, but it can also provide the relief you need to reset your finances. Contact our office today for a free consultation to explore your options and create a plan to move forward with confidence.
