Bankruptcy and Back Rent: What Are Your Options?

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Portland area couple considers their options on unpaid rent debts and filing for bankruptcy

Bankruptcy is a major decision. If you’re considering bankruptcy in Oregon or Washington, you need to know what to expect, and what your options are. In this article, we’ll discuss what you need to know about how filing for bankruptcy will affect your unpaid rent and your living situation.

Can You File for Bankruptcy on Back Rent?

Yes, unpaid rent is considered a debt and is thus dischargeable. However, there is one big difference between unpaid rent and other forms of debt – and that is your lease. By declaring bankruptcy and having your unpaid rent discharged, you’re breaking the lease agreement. Your landlord will move to evict you when they are able.

What Happens to Unpaid Rent in Bankruptcy?

In Chapter 7 bankruptcy, which is the most common type for individuals, unpaid rent is part of your debt that’s discharged. Your landlord will not be able to collect anything from you. The downside to this option is your lease will be canceled and you’ll be forced to find a new place to live.  

Can You Keep Your Apartment If You File for Bankruptcy When You’re Behind on Rent?

If you file for Chapter 7 bankruptcy while you’re behind on rent and you wish to stay in your apartment, you’ll have to pay back your unpaid rent. In most bankruptcy cases, you have 30 days to do this. In Chapter 13 bankruptcy, you may be able to stay in your current lease if your back rent is part of your repayment plan. 

Can Your Landlord Evict You If You File for Bankruptcy?

No. When you file for bankruptcy, a temporary stay is issued on all debt collection activities. Your bankruptcy case will be allowed to proceed, after which your landlord will again move to evict you. As soon as you know you’re facing eviction, we recommend calling our attorneys to discuss your options. Eviction can be a scary process for many people, especially if you’re in debt and don’t know what your next move should be. 

Bankruptcy in these cases allows you to retake control of your own immediate and long-term future.

Can You File for Bankruptcy Before an Eviction?

Yes, it works the other way, too. If you file for bankruptcy before an eviction notice, your landlord will not be able to begin an eviction. When a bankruptcy is going on, a temporary stay on debt collection activities automatically goes into effect. Eviction is considered a debt collection activity and cannot proceed until the stay is lifted.

Learn More About Your Options When It Comes to Bankruptcy and Back Rent

If you’re having trouble keeping your head above water financially and unpaid rent is a big part of the equation, you do have options. Your case is unique and we can help you navigate your path forward.

Let one of our knowledgeable bankruptcy attorneys answer your questions. Give us a call today for a free consultation.

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Bankruptcy and Back Rent: What Are Your Options? in Portland OR and Salem OR

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