Bankruptcy can assist in safeguarding home and preventing home foreclosures. But what happens when a filer is in a rented property? This is a tricky question and a very common one across potential bankruptcy filers. If you are current on your rents, then it shouldn’t be an issue to prevent eviction from your home or an apartment. But if you are not, then the landlord has every right to pursue a possession and eviction judgment from respective authorities. Bankruptcy has different consequences depending on whether a landlord has achieved a judgment of eviction and possession or not.
If the landlord achieves the eviction and possession
The bankruptcy courts usually do not override an existing judgment received from another court. The purpose of the bankruptcy court is to defend a debtor from harassment and undue foreclosure and ensure a basic life after bankruptcy proceedings. However, if the landlord has already achieved a judgment of eviction and has possession of the property, the options with the bankruptcy filer are very limited.
The landlord can seek previous rent dues and some future rent security or proof of ability to pay rent to let you back in the home or apartment. If you are willing to find a different accommodation or move in with friends or family, the rent owed needs to be disclosed for a potential discharge of the same. The basic crutch of the situation is the ability to pay previous rent dues and the future rent with the future disposable income. If it isn’t possible, the eviction and possession judgment from the respective courts hold and the bankruptcy court cannot do anything to reverse the same.
The clock is running!
Applying for bankruptcy can only provide an additional time of 30 days to negotiate a reasonable deal with the landlord or to pay back previous dues and come up with substantial proof of being able to afford the rent for future years. Learn more such key information about bankruptcy on https://recoverylawgroup.com/bankruptcy/.
If the landlord is in the process of achieving eviction and possession
If the landlord is in the process of evicting the bankruptcy filer, the process can be set on hold until the bankruptcy court arrives at a judgment. To evict the filer from the premises, the landlord must obtain permission from the bankruptcy court. If the debtor has deliberately not paid rents to discharge them and isn’t in good faith, the permission for eviction can be granted. Also, if the tenant used the property for drugs and has damaged the property, a bankruptcy court can allow for criminal proceedings and immediate eviction.
In both cases, there must be a practical plan to pay off the previous dues and have the capability to manage the future expenses as well. In addition to these, the bankruptcy trustee can terminate the lease agreement and call for a future eviction if he deems it right for estate purposes. This can happen if the rent is way too high compared to the financial situation of the bankruptcy filer. The trustee might recommend the filer to move into a reasonable rent place to add more weight to the bankruptcy estate.
Make the right move!
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