Will Bankruptcy Affect My Rental Agreement?

Understandably, you will have many questions about how filing bankruptcy will impact different financial obligations. One frequently asked question is whether filing bankruptcy will affect a rental agreement for an apartment or a house. Another one is, “Can I rent after bankruptcy?” 

As long as you are current on your rent payments, nothing should change when you file bankruptcy. In addition, you can continue to rent after bankruptcy. 

Worried about how bankruptcy will affect your rental home? Contact a bankruptcy attorney in Las Vegas. 

Can my property owner end my lease because I filed bankruptcy? 

If your rent payments are current and you are not behind, then no, the landlord or property owners cannot end your lease contract when you file bankruptcy. You will continue paying rent on your apartment or house as you have been. 

Can I be evicted after filing for bankruptcy? 

It depends on whether you are current on your rental payments or behind. If rent is current, then no, you cannot be evicted because you filed for bankruptcy. On the other hand, if you were already behind on rent when you filed, and your landlord had already started eviction proceedings, things are a bit more complicated.

For starters, your bankruptcy only protects you from eviction temporarily because you will receive an automatic stay from the bankruptcy court. If you want to remain in your home, you need to work out a payment arrangement with the landlord and bring your payments current.

If you do not want to bring your rent current, you need to start looking for a new home and move out. Your landlord can petition the court to lift the automatic stay so they can proceed with the eviction process if you do nothing. In addition, you are responsible for all rental payments on and after your filing date. 

Do I have to pay past-due rent if I file bankruptcy?

Your bankruptcy protects you from having to pay any past-due rent as of the date your bankruptcy is filed in court. However, if you want to remain in your home, you must bring your payments current. 

Otherwise, you will be evicted at some point but will not be responsible for any past-due rent. You will be responsible for all unpaid rent from the date you filed until you move out. 

What is an automatic stay in bankruptcy?

An automatic stay is a special provision that temporarily stops all debt collection activities and protects against garnishment, foreclosure, and eviction. It takes effect the moment your bankruptcy is filed in court. 

Can my property owner refuse to renew my lease because I filed bankruptcy? 

Property owners and landlords always have the option to choose not to renew a lease whether you file for bankruptcy or not. Most landlords will renew the rental lease agreement if you have been paying your rental payments on time. You can also point out that filing bankruptcy has alleviated other debts, so you have more income to ensure you pay your rent on time. 

Do I have to notify my landlord if I file for bankruptcy?

When you file for bankruptcy, you must list all your creditors, including your landlord. While you do not have to notify them yourself, they will receive a notice from the bankruptcy court. As such, it may be worth your time to inform your landlord yourself to let them know they will be receiving this notice and reassure them it will not impact your ability to continue to pay your rent. 

Do I have to keep paying rent after filing bankruptcy?

You must keep paying rent after filing bankruptcy, especially if you do not want to move and want to keep your current apartment or house. Otherwise, as mentioned previously, you are not responsible for past-due rent. But, you are still responsible for paying the current rent until you move out because any new debt incurred after filing bankruptcy cannot be included or discharged.

Can I move during my Chapter 13 or Chapter 7 bankruptcy?

Should your house or apartment lease come up for renewal during Chapter 13 bankruptcy or Chapter 7 bankruptcy proceeding, and you do not want to renew it, or your landlord chooses not to renew it, you can move.  

If I move, will it be more challenging to find a rental with a bankruptcy on my credit report?

It can be more challenging to move either during bankruptcy or after it has been discharged. Before discharge, your credit score and report will show you have missed payments and late payments to your creditors. After discharge, while those debts will be zeroed out, it will show you filed bankruptcy. 

Landlords can decide not to rent to you based on your credit. However, renting during or renting after bankruptcy is possible as long as you are willing to do some extra work. 

Tips to improve your chances of finding a house or apartment after bankruptcy.

• Show the property owner proof of steady employment. Steady employment shows that you have a stable job and can afford the rent. 
• Have your current landlord provide a reference for on-time payments. Most landlords are willing to write a rental history reference when you have paid your rent on time, even when not renewing the lease with them. 
• Inform the property owner of your bankruptcy proceeding or discharge. Making them aware of the situation before they pull your credit history is beneficial because it will not shock them.
• Ask someone with good credit to cosign the lease. Having a friend or family member with good credit makes it easier to have your lease approved. 
• Be prepared to pay a larger security deposit. Some landlords may require you to pay a larger security deposit since they consider you a financial risk. For example, you may need to pay the first and last month’s rent in advance, along with the usual security deposit. 
• Offer to pay several months’ rent in advance. Another option, if you have the money, is to pay two, three, or more months in advance. 

Should you have difficulties finding a landlord who is willing to rent to you, it can be beneficial to contact your bankruptcy attorney. They may be able to refer you to property owners who rent to people who have filed bankruptcy. 

Is your landlord preparing to start eviction proceedings? Get help from DeLuca & Associates bankruptcy attorneys in Las Vegas with a free consultation today. 

Sources:

United States Bankruptcy Code Section 362. (2020).

Block, S. (2019). If a Tenant Files for Bankruptcy, Do They Still Have to Pay Rent?

Thompson, L. (2022). Can a Landlord Deny an Application for Bankruptcy?