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Chapter 7 And Renters Rights
It goes without saying that everyone needs a home and roof over their heads. However, facing bankruptcy can be daunting and stressful; and the fear of falling behind on rent payment and being evicted can cause a lot of anxiety. Everyone who is renting a place should know about Chapter 7 bankruptcy and renters' rights. This will help them avoid eviction and catch up the rent payment. |
It should be made clear that just because you file for Chapter 7 bankruptcy, it does not mean that you no longer have the obligation to pay the rent. You do but Chapter 7 can safe you from any eviction action.
Once a renter files for Chapter 7, all collection against him are stopped. Just filing for bankruptcy allows the creation of an automatic stay on your creditors and they cannot take can action against you without first getting permission from the court. But the landlord still has the right to go after the guarantor in the lease and get him or her to pay the bank rent.
Once you file for bankruptcy and you continue staying in the rented premises, the rent for that period is considered to be administrative claim. All administrative claims after filing for bankruptcy are paid before any other claims. Therefore, the court will see the rent after the bankruptcy is paid by what little money you have. In case the money is insufficient to settle all the administrative claims, the amount is proportionately divided among all the claimants.
Usually all leases have a provision that stipulate that if a tenant files for bankruptcy, the lease is violated and therefore, the landlord can evict the tenant. However, the law does not allow a landlord to terminate a lease just because of Chapter 7 bankruptcy.
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Chapter 7 And Renters Rights
