When the Kentucky bankruptcy court receives your bankruptcy petition, it may immediately order an automatic stay. This means that your creditors may be temporarily barred from pursuing collection activities against you, including your landlord from evicting you from your home due to unpaid rent. While this protection may feel like a godsend, so to speak, sometimes it is better to walk away from this property independently. With that being said, please read on to discover whether it is allowed, or even doable, to keep your lease during bankruptcy if you are already behind on your rent payments, and how a seasoned Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you take the right action.
Can I keep my lease if I file for bankruptcy while behind on rent?
In a Chapter 7 bankruptcy case, you may have 60 days after your filing date to choose whether to assume or reject your lease. For one, assuming the lease means that you will continue the lease and live in the rental property, ultimately requiring you to remain current on your rental payments from this point forward. Secondly, as you may guess, rejecting the lease means you terminate your lease agreement and surrender the leased property by moving out. With this, you may only be financially obligated to pay off the rent billed within the 60 days between your bankruptcy filing date and your lease rejection.
While you may want to hold on to your home, you must deeply think about the long-term consequences of keeping your lease during bankruptcy when you are unequipped to afford it. That is, even though your past-due rent from before your filing date may be discharged, you may still be responsible for keeping up with your rent throughout your bankruptcy. If you do not, your landlord may file a motion to lift the automatic stay. If this motion is granted, they may commence eviction proceedings against you. Ultimately, an eviction record can seriously hurt your ability to rent property after bankruptcy.
Can Chapter 13 bankruptcy help me catch up on past-due rent?
All things considered, it may be easier to keep your lease if you filed for Chapter 13 bankruptcy. This is because you may spread your unpaid rent over three to five years through your court-ordered repayment plan. Once your landlord sees this plan, and you are consistent in following it, they may allow you to stay in the rental property without attempting to lift the automatic stay and evict you. All the while, if you qualify for Chapter 13 in the first place, this means the court believes you have a steady enough and sufficient amount of income to keep up with your monthly expenses, including your rent. Consult with a lawyer first to see if you can reasonably handle this bankruptcy path.
As soon as you find yourself in potential legal trouble, you must retain representation and advisement from a competent Louisville, Kentucky consumer bankruptcy lawyer from Schwartz Bankruptcy Law Center. You should not have to put up this fight alone; we are here to help you.
