Should you ever file for bankruptcy in the US, it is almost certain that sooner or later your landlord will find out about it. If you’re on a month-to-month rental agreement, your landlord generally won’t be notified of your bankruptcy filing. However, if you have a signed lease, your landlord must be listed as a creditor in your bankruptcy paperwork, even if you’re current on your rent.
Here’s a breakdown of how this process typically affects the landlord-tenant relationship:
Bankruptcy Filing Is Open For Prying Eyes
Once a debtor has declared bankruptcy, his or her case becomes a public record which is accessible to everyone. It implies that landlord is not left out of reason in this regard that Landlord can also get hold of these records as well. Bankruptcy cases are being filed in federal bankruptcy courts and the common way to look for the information, is through PACER system or Public Access to Court Electronic Records.
Notification of Creditors
In a bankruptcy petition, you need to enumerate all the creditors who should be included. It is important to realize that in the case of owing rent arrears, or any other money to your landlord at the time of filing for exemption, your landlord is regarded a creditor. This therefore implies that you landlord will be granted a stay notification from the bankruptcy center. This paperwork alerts creditors who are recorded on the petition and shows them the details of what they should do in their case.
Automatic Stay Impact
The time of the bankruptcy petition being filed, the automatic stay shall go into effect. This respite gives you a reasonable breathing space whereby your creditors will not be permitted to collect debts. A tenant this means the landlord’s eviction has become temporarily barred so he cannot be evicted just because he is backward due rent accumulated before filing the bankruptcy. Nonetheless, one should be aware that a stay does not hinder any legal actions associated with the rent due upon the filing date or for instances of lease violations or property damages.
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If you file for bankruptcy, you need to think of how it will affect your correspondence with your landlord. automatic stay gave you the breathing space for a while, but behind it, your rent which is due every month has to be paid on time to avoid eviction. Alongside as encouraging a landlord to terminate a lease with the current tenants, bankruptcy process possibly have been the deciding factor behind his decision for not renewing some of the leases or signing new agreements with tenants.
Conclusion
Bankruptcy often offers much needed financial instruments that could ease insurmountable loans, on the other hand, it also has many ramifications and should be thought of before deciding to file for one. If you’re struggling to get or to keep your housing due to your bankruptcy and you fear bankruptcy will affect your rent, contact a bankruptcy attorney to know more of your orders. This also means that your landlord should keep in mind to be in constant communication for effectively managing expectations that are linked to your obligations.
