Will Filing Bankruptcy Affect My Apartment Lease?

Filing for bankruptcy doesn’t cancel your lease or force you to move. If you’re current on rent, you can keep your lease by continuing to pay on time.

If you’re behind, the automatic stay temporarily prevents eviction. You’ll need to catch up on rent to stay. Bankruptcy can wipe out back rent owed before filing. You’re still responsible for rent after filing.

If there’s already an eviction judgment, you’ll need to meet certain requirements to stop the eviction.

How Does Bankruptcy Affect My Lease?

If you’re up to date on your rent and plan to stay in your rental, bankruptcy likely won’t cause major changes. You’ll generally keep your lease as long as you continue paying rent on time.

You must follow all terms of your rental agreement. Speaking with a bankruptcy attorney for free can help you understand your options.

Listing Your Lease on Bankruptcy Forms

You’ll list your lease on Schedule G of your bankruptcy forms. Schedule G is specifically for unexpired leases and executory contracts. Active rental agreements fall into this category.

If you’re current on rent payments, Schedule G will be the only place your lease appears. You’ll need your current landlord’s name and contact information.

If you’re behind on rent, you’ll also include the unpaid rent as a debt on Schedule E/F. You’ll need your landlord’s name, mailing address, and an estimate of back rent owed. Make sure all information is accurate.

Do You Need to Tell Your Landlord About Filing Bankruptcy?

No, you aren’t required to notify your landlord ahead of time. After you file, the court will send your landlord a copy of Official Form 309A. Your form provides notice of your bankruptcy case.

If your landlord is an individual rather than a large property management company, giving them a heads-up can help. You might let them know you’re filing to get back on track financially. Reassure them that you intend to keep paying rent.

What Happens to My Lease After Filing Bankruptcy?

Filing bankruptcy doesn’t automatically cancel your lease or force you to move out. What happens next depends on whether you want to stay or move.

You need to understand your responsibilities under the lease agreement after filing. Paying rent is especially important.

If You Plan to Stay

If you’re keeping the lease, you’ll need to continue paying your full rent. Your payment includes any fees, such as late payments, specified in the lease. Staying current on rent is critical if you want to keep the lease.

What Does It Mean to Assume a Lease in Bankruptcy?

Assuming your lease means formally deciding to keep the lease agreement. You’ll continue honoring its terms. You don’t have to fill out a separate form to assume the lease in Chapter 7 bankruptcy.

You need to stay current on your rent payments and follow all lease terms. If you’re behind on rent but want to assume the lease, you’ll need to catch up. Work out a plan to pay overdue amounts with your landlord.

Landlords can sometimes request bankruptcy court approval to reject your lease if you’ve violated its terms.

If You Plan to Move

If you’re using bankruptcy to break your lease and plan to move out, you don’t have to keep paying rent after you leave. However, if you’re still living in the property after filing, you must pay rent.

Rent for time you remain there is considered a post-petition obligation. It isn’t included in your bankruptcy discharge and will still be your responsibility.

What Happens to Your Security Deposit in Bankruptcy?

Security deposits can become a tricky issue in bankruptcy. If you’re staying in your rental and continuing with the lease, your landlord will likely hold onto your security deposit. Deposits cover potential damages or unpaid rent.

If you break the lease as part of your bankruptcy and move out, your landlord may use your security deposit. Deposits can cover unpaid rent or damages.

Rules on deposits vary by state. Check your local laws or ask a bankruptcy attorney for guidance. Make sure your landlord accounts for any deductions from your deposit.

Can You Be Evicted After Filing Bankruptcy?

Filing for bankruptcy doesn’t automatically mean you’ll lose your home. Whether or not your landlord can evict you depends on your rent payment status. Your plans for the lease also matter.

Bankruptcy laws offer some protections. Specifics depend on your situation and which type of bankruptcy you’re filing.

If You’re Current on Rent

If you’re up to date on rent and haven’t violated any terms of your lease, your landlord can’t evict you simply because you filed for bankruptcy. Federal bankruptcy law protects tenants from being penalized for filing.

As long as you continue paying rent on time and following lease terms, you can stay in your home.

If You’re Behind on Rent

If you’re behind on rent when you file for bankruptcy, the automatic stay temporarily prevents your landlord from moving forward with eviction proceedings. It also stops other debt collection activities.

The stay gives you breathing room to figure out your next steps. Your options depend on whether you want to stay or move out.

If you want to stay in the home and keep your lease, you’ll need to make arrangements. You must catch up on the back rent. Since bankruptcy eliminates many debts, it’ll free up income.

If you don’t want to bring the lease current, your landlord will need to ask the bankruptcy court to lift the automatic stay. Once lifted, they can move forward with the eviction process.

What if There’s Already an Eviction Judgment?

If your landlord already has an eviction judgment against you before you file for bankruptcy, the rules differ. Bankruptcy law may protect you from eviction, but only if you meet specific requirements.

If you can’t meet these requirements, your landlord can proceed with the eviction. They won’t need permission from the bankruptcy court.

To qualify for protection under the automatic stay after an eviction judgment, you must:

• Certify to the court under penalty of perjury that state law allows you to fix the default that led to the eviction judgment
• Deposit any rent due within 30 days of filing your bankruptcy case with the clerk of the bankruptcy court

Will Bankruptcy Affect Your Ability to Renew Your Lease?

Filing for bankruptcy shouldn’t automatically prevent you from renewing your lease or getting a new lease. However, many landlords use credit checks when deciding whether to offer or renew a lease agreement. A bankruptcy filing could appear on your credit report.

The decision to renew your lease is up to the landlord. Your bankruptcy filing may or may not factor into their decision.

If your landlord is an individual rather than a business or property management company, explaining your situation can help. Your bankruptcy might actually improve your financial situation and make you a more reliable tenant.

After bankruptcy, your disposable income is no longer tied up in debt payments. Your income isn’t at risk of garnishment. You can pay rent on time more easily.

If you’re planning to move to a new apartment or home, being upfront about your bankruptcy with potential new landlords can work in your favor. Combined with a strong rental history, a security deposit, and steady employment, honesty helps.

Proof of stable income can help reassure landlords. You’ll be a responsible tenant, even if your credit history isn’t perfect.

How Bankruptcy Impacts Your Credit

Filing for bankruptcy can lower your credit score. It will appear on your credit report for up to 10 years. However, bankruptcy also wipes out debts including credit card debt, medical bills, and even some student loans.

These debts may have been causing missed payments or defaults. If you haven’t made timely payments or had accounts in default, these seriously harm your credit over time.

Many people see their credit improve after filing bankruptcy. You can start rebuilding with a clean slate. Many people see improvement within a year of filing.

Protecting Your Home While Getting a Fresh Start

Bankruptcy is meant to give you a fresh start without losing essentials. Your home is an essential. If you’re renting and up to date on your monthly payments, you should be able to stay in your home without issues.

If you’re behind on rent, you’ll need to make a plan. Catch up on payments if you want to stay in your home and keep your lease. Get a free consultation with a bankruptcy attorney to explore your options and protect your housing.