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Including late rent in bankruptcy


Anisah_H
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Someone told me you can do this if you file bankruptcy but I wanted to see if anyone else has done it or knows if it's legit or not.

If you haven't paid rent in a couple/a few months and you have enough other debt to file bankruptcy, you can include your late rent in the bankruptcy, and as long as you pay the current rent after you file, they cannot evict you and you don't have to pay the rent you didn't pay.

Thanks.

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Someone told me you can do this if you file bankruptcy but I wanted to see if anyone else has done it or knows if it's legit or not.

If you haven't paid rent in a couple/a few months and you have enough other debt to file bankruptcy, you can include your late rent in the bankruptcy, and as long as you pay the current rent after you file, they cannot evict you and you don't have to pay the rent you didn't pay.

Thanks.

I'm not sure about a Chapter 7 but I had a Chapter 13 and I was able to include my arrearage. I did have to keep up my payments after that. If the debtor(s) are filing a Chapter 7 they may be required to catch up all the back payments before their bankruptcy can be discharged. This applies to a mortgage. Make sure your attorney knows. I did find this segment and from what is says, it appears that you can include arrearages in rent payments:

"A discharge permanently prohibits creditors from attempting to collect those secured and unsecured debts listed in the bankruptcy filing. These could include past due mortgage or rent payments and penalties, credit card debt, medical bills, or consumer loans. " xcoffx

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Yes, you can include rent arrearages, but if you're that far behind in your rent, they CAN evict you. Under the new bankruptcy law, the automatic stay no longer stops an eviction.

Rent is not a secured debt, if they don't evict you for not paying rent and the arrearage is discharged, they cannot make you pay it. It's nothing like a mortgage.

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Under the new bankruptcy law, the automatic stay no longer stops an eviction.

Not so. The automatic stay still applies and the landlord must file a motion to be released from the stay. A landlord cannot file for a Forcible Entry and Detainer suit while under the restrictions of the stay. From what my lawyer told me, getting a release granted is not easy when there is no security interest to the debt.

I had to investigate this myself because one of my tennants had gotten very behind on her rent (like 2 months) and I needed to know what I could and could not do.

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  • 2 weeks later...

I may try to get a free consult with a bk lawyer and see what they say. But I am trying to make a payment plan on my rent. I was supposed to move out at the end of December and signed a lease, but the house isn't free yet (another big hassle and possible legal problems). I may end up trying to stay here.

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Not so. The automatic stay still applies and the landlord must file a motion to be released from the stay. A landlord cannot file for a Forcible Entry and Detainer suit while under the restrictions of the stay. From what my lawyer told me, getting a release granted is not easy when there is no security interest to the debt.

I had to investigate this myself because one of my tennants had gotten very behind on her rent (like 2 months) and I needed to know what I could and could not do.

The link LadynRed posted above says: "In most cases, the judge will lift the stay within a matter of days and the landlord can proceed with a termination and eviction."

So now I am not sure if filing bankruptcy will let me stay in my apartment or not. Methuss, What exactly did your lawyer tell you, if you don't mind sharing.

Thank you.

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basically he told me not to violate the stay, and that included reporting lates to the bureaus. He also said I cannot even give them a Notice to Pay or Quit while the stay is in effect.

Lifting the stay involves proving the tennant has not paid their rent and is at least 30 days behind. Since rent is always paid in advance, that means I can't request a stay until the tennant has hit two months behind.

e.g. They don't pay January. I have to wait until after they miss the grace period on the February payment before I can request a lift of the stay.

Once the stay is lifted, I then have to follow my State laws on landlording (which is similar in all states)... serve a 7 day Notice to Pay or Quit, followed by a Forcible Entry & Detainer suit, then a sheriff to evict.

All in all, once a tennant files bankruptcy, it takes about 75 days to get them out. And if they make rent payments so that they are always 29 days behind, I am totally stuck.

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All in all, once a tennant files bankruptcy, it takes about 75 days to get them out. And if they make rent payments so that they are always 29 days behind, I am totally stuck.
Is it all that bad to have a slowpay tenant? I'm thinking that you still get paid, plus late fees. The only thing you may lose is the one month of rent- which should be covered by security deposit. In the end, your tenant gets a roof over their head and you get your money.
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