Did you know that bankruptcy can discharge a debt owed to a landlord? If you file for bankruptcy before the landlord evicts you or while the eviction process is still pending, you may be able to stop the eviction temporarily. While it can help with the debt owed and by slowing the eviction process, filing for bankruptcy does not remove an eviction from your consumer credit report.
Many Bankruptcy Filers Have Rental Debt:
It is relatively common for renters to owe their landlord money after they are evicted from a rental home or other property. Unlike mortgage payments, rental payments are not secured. Rent is an unsecured debt, just like any debt owed to a credit card company or medical facility. Unsecured debts are discharged in Chapter 7 bankruptcy or Chapter 13 bankruptcy after completing the agreed-upon repayment plan.
In some jurisdictions, you’ll find there are specialized courts dedicated to handling evictions and renter/landlord disputes. Some of these courts hold the authority to issue judgments against renters for specific amounts in connection to past due rent or money owed for damages. Judgments obtained concerning eviction or renter/landlord disputes may be discharged. However, the eviction itself will still be recorded on the consumer’s credit report and will show up in various background checks.
You may already be aware that not all debts are eligible for bankruptcy discharge. For example, if you purposefully caused damage to a rental property, the landlord could file a lawsuit requesting that the court make the debt exempt from discharge. Most landlords don’t go to the trouble unless the damage left the rental in need of extensive repair, and there is significant proof that the renter’s damaging actions were purposeful.
Does Bankruptcy Help If You Are Being Evicted?
If you think you may be evicted or if the action is already pending, filing bankruptcy could affect the eviction process. If there is not judgment issued, bankruptcy can stop the process temporarily. The landlord does have the right to file a motion asking the judge to lift the automatic stay so the eviction can proceed. If the judge grants the motion, the landlord can resume the eviction.
If you need information about how filing bankruptcy could help you with a pending eviction, please don’t hesitate to get in touch with our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.