Will My Landlord Know I Filed for Bankruptcy?
Are you considering filing for bankruptcy? If so, you might wonder about how your decision will affect the rest of your life. Bankruptcies get reported to various parties, including credit bureaus, which raises the question: will your landlord learn if you’ve filed for bankruptcy?
Whether your landlord finds out that you’ve filed for bankruptcy may depend on various circumstances, including the type of bankruptcy proceeding you choose and your lease’s status. An experienced bankruptcy lawyer can help you understand the ramifications of a bankruptcy filing on your rental property situation and your legal options for mitigating potential adverse consequences for your home.
If I File for Bankruptcy, Will My Landlord Find Out?
The bankruptcy court does not notify a debtor’s landlords when the debtor files for bankruptcy. However, credit bureaus receive notice of bankruptcy filings and will note the filing on the debtor’s credit history and adjust their credit score. Thus, a landlord may not find out about your bankruptcy unless they review the bankruptcy court’s docket to find your case or request your credit report. However, the law restricts third parties’ ability to request your credit report, so your landlord may not run a credit check unless you ask to relocate to another unit in your property or renew your lease.
Your landlord will receive notice of your bankruptcy if you list them as a creditor in your bankruptcy filing. You may have to list your landlord as a creditor if you owe unpaid rent, since that constitutes a debt potentially dischargeable in bankruptcy, or if you file for Chapter 7 bankruptcy, which may allow you to break your lease.
What Happens Once My Landlord Finds Out I Filed for Bankruptcy?
Once your landlord learns about your bankruptcy, your landlord-tenant relationship should not immediately change. You can continue to live in your rental if you remain current with your rental payments under your lease. However, filing for bankruptcy may make it challenging to obtain a renewal of your lease. Your landlord may view you as a risk of non-payment of rent due to your bankruptcy and decline to renew your lease.
If you list your landlord as a creditor due to unpaid rent or because you intend to break your lease in a Chapter 7 bankruptcy, your landlord will get to participate in the creditors’ meetings with the bankruptcy trustee. Your landlord can also file a claim against your bankruptcy estate to recover payment of back rent.
Can a Landlord Evict Me for Filing Bankruptcy?
One of the most critical questions many people have about pursuing bankruptcy relief is, “Can I stay in my apartment if I file bankruptcy?” Tenants may worry about getting evicted simply for filing for bankruptcy. Fortunately, one benefit of bankruptcy filing is the automatic stay, which prevents creditors from pursuing debt collection efforts.
If you owe back rent to your landlord and list them as a creditor, the automatic stay bars your landlord from filing an eviction proceeding. If your landlord wishes to evict you, they must wait until your bankruptcy case concludes or petition the bankruptcy court for relief from the automatic stay. However, the automatic stay may not prevent your eviction if your landlord filed an eviction notice before you filed for bankruptcy, if you stopped paying rent during your bankruptcy case, or if you willfully damaged the property.
Chapter 7 Vs. Chapter 13 Bankruptcy: How It Affects Your Lease
The effect of a bankruptcy filing on your lease may depend on whether you file for Chapter 7 or 13. In a Chapter 7 bankruptcy proceeding, you can “reject” (break) your lease if you cannot afford the rental payments. However, if you wish to stay in your rental, you can “assume” (keep) your lease if you make all required rent payments.
A Chapter 13 bankruptcy can help you keep your lease if you’ve fallen behind on your rental payments. Chapter 13 allows you to restructure your debts under a court-approved repayment plan. A Chapter 13 plan may allow you to catch up on missed rental payments over three to five years. However, a repayment plan approved by the court may require you to make all future rental payments during the plan period; missing monthly payments again during your Chapter 13 bankruptcy could jeopardize your right to relief.
Does Bankruptcy Discharge Unpaid Rent?
Unpaid rent constitutes an unsecured consumer debt. Thus, you can use bankruptcy to discharge your unpaid rent, which relieves you of your financial obligations of unpaid past rent to your landlord. However, bankruptcy does not allow you to live in your home rent-free. Your landlord can still pursue your eviction for non-payment of rent. The bankruptcy discharge merely precludes your landlord from pursuing legal action in the eviction case or a separate proceeding to recover that unpaid rent.
Can I Rent a New Apartment After Filing for Bankruptcy?
Tenants may also worry about their ability to rent a new apartment after they’ve filed for bankruptcy. Bankruptcy filings can remain on a person’s credit report for up to ten years, depending on the type of bankruptcy they pursue. When a person who has filed for bankruptcy in the past few years applies for a new apartment, their prospective landlord will likely run a credit check as part of the application process. Thus, prospective landlords will learn about the applicant’s past bankruptcy and prior rental history, which they may view negatively and decide not to approve the prospective tenant’s application.
However, applicants can have an open, honest dialogue with prospective landlords to discuss their past bankruptcy and the steps they’ve taken since then to improve their financial situation. Although a bankruptcy filing will immediately damage a person’s credit score, their score may promptly begin to rise thereafter as the person makes timely payments or discharges debts in bankruptcy.
Know Your Rights – Find Out How Bankruptcy Affects Your Rental Situation
Before filing for bankruptcy, talk to an experienced Ohio bankruptcy attorney to learn more about what happens after filing for bankruptcy and your legal rights regarding debt relief. Contact the law firm of Amourgis & Associates, Attorneys at Law, today for a confidential and free consultation with a knowledgeable bankruptcy lawyer to discuss how a bankruptcy filing may affect your living situation and your rights to stay in your rental.
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At Amourgis & Associates, Attorneys at Law, we only represent consumers. We fight for regular people who have been seriously hurt in accidents. We fight for people who are being crushed by overwhelming debt and need a fresh start. We fight for individuals and families. Never businesses. Never insurance companies. We are loyal to the consumer.
