Back Rent and Bankruptcy
Depending on your situation, bankruptcy can affect the amount of back rent you owe in different ways. It can sometimes be completely discharged through bankruptcy and go away forever with the rest of your debts. Other times, the bankruptcy case may have very little effect on your situation. Understanding back rent and bankruptcy can help you know what you will be up against when you file your bankruptcy case.
Back Rent Can Be Completely Forgiven in Bankruptcy
If you plan to completely sever ties with your current landlord, unpaid rent amounts will usually go away with the bankruptcy. This usually happens when you have already moved out of the property. It also happens when you “reject” your lease during the bankruptcy.
A lease “rejection” simply means that you are no longer going to continue with the housing contract. You are essentially “rejecting” the lease and adding it to your bankruptcy. When you reject a lease, you will need to make arrangements with your landlord to move out quickly, usually within the next 2-3 months or sooner. If you do not move out timely, the landlord could lift the bankruptcy’s protective stay and evict you from the property. However, generally, any back rent that you owe will be added into the bankruptcy and the lease will be terminated.
Unpaid Rent Can Remain After Bankruptcy
Many people falsely believe that they can file bankruptcy on their back rent and just continue as usual with their housing lease. This is incorrect. Back rent amounts remain the same if you want to stay in your lease. If you want to keep living in the same place, you will usually need to come back up to date on your rent.
Even though you have filed bankruptcy, your lease terms generally stay the same. This essentially means that any back rent you owe will stay the same if you want to keep living in the same property. The landlord can still evict you even if you are not “personally” liable on the lease any more through the bankruptcy. You will likely be evicted if you do not go back and catch up on your rent.
