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How does bankruptcy affect your apartment rental?

On Behalf of | Aug 4, 2022 | Bankruptcy |

When you live in an apartment but also have other bills to pay, things can get tight. You might already be dealing with judgments against you or have poor credit, making it impossible to move to a new unit right now even though it might save you some money.

This kind of situation isn’t uncommon, but it is frustrating. Landlords tend to be reluctant to rent to people with poor credit or those who have a history of not making payments on time. Your current landlord may have no knowledge of your situation unless you’ve missed payments, which means that this home could be the only one you can get in the near future.

Will going through bankruptcy help get a new apartment?

If you go through bankruptcy, it could hurt your ability to get a new apartment while you’re still involved in an active case. However, if you finalize the case and are in a better place financially, landlords may again begin to consider your application.

Will your current landlord find out about the bankruptcy?

Usually, the answer is yes. This is because an automatic stay goes into place, and all creditors have to stop collecting debts. This includes landlords. If you missed payments, they’ll receive a notice.

As a tenant, you will need to decide if you are going to reassume the lease or reject it during this stay. You should not stop paying your rent unless your attorney or the court tells you to do so.

In some cases, your landlord will not be informed. Usually, if you’re on a month-to-month lease, they won’t find out about the bankruptcy. Keep that in mind, so you can be ready for discussions about your lease and be prepared if your landlord decides to end the agreement and terminate your stay.

Bankruptcy has positives, but your apartment is one item that can be negatively affected. To protect your rights, you should learn more about bankruptcy before you file to be clear on how your right to stay in your apartment may be affected by your application for bankruptcy protection in the future.