In this underwater housing market, the old adage that renting a home is the same as throwing your money away can be grossly inaccurate. In many cities, from San Francisco to Dallas to New York, “price to rent” ratios make leasing property a no-brainer. But now, even smaller cities like Omaha, Oklahoma City and Kansas City appear on top ten lists of places better to rent than own.
Yet, even in a period where renting can be financially friendlier than owning, many renters continue to face this tough economy head-on, with no chance of home equity to afford them a substantial bailout. In turn, some are turning to bankruptcy in the hopes of getting back on their financial feet and avoiding eviction from their “Rental Sweet Rental.”
If you too are considering bankruptcy as a way to avoid being evicted from your apartment or property, here are a few fast facts that you should consider:
Better Safe Than Sorry: Continue Paying Your Rent
While a bankruptcy filing will trigger an “automatic stay” which protects debtors and their property from creditor actions, it is recommended that you continue paying your rent for as long as you can. The reason is simple: if you fall behind on your rental payments your landlord will have the right to start the eviction process—a process that’s easier to avoid than to stop.
The Power of the Automatic Stay
In the alternative, if you are already behind on your rent, but your landlord has not proceeded with an eviction or won an order to evict you, your bankruptcy filing will trigger the automatic stay and stop the eviction.
When the Automatic Stay Won’t Work
In some cases, the court will afford a landlord an exemption to the power of the automatic stay. In this scenario, your landlord can evict you despite your bankruptcy filing. If you are considering bankruptcy to stop your eviction, talk with an experienced bankruptcy attorney to understand the possibilities of your landlord being granted this exemption from bankruptcy’s automatic stay.
Bankruptcy and Back Rent
Even if your landlord is granted an exemption from the automatic stay and allowed to proceed with your eviction, a bankruptcy is still a powerful tool through which you can erase any missed rent payments in the weeks and months leading up to your bankruptcy filing. Removing these obligations can be your first best step to saving for your next place to live.
In addition to the powers of bankruptcy to stop an eviction or, at least, discharge back rent obligations; your bankruptcy attorney may also be able to negotiate a settlement with the landlord that will allow you to remain in your rental. While this type of plan will normally force you to pay any missed rental payments with interest and charge you with staying current on future payments, like a Chapter 13 repayment plan that allows homeowners to keep their property, you can also avoid what can sometimes be a substantial hassle of moving elsewhere.
As thousands of American renters search for more immediate and steady help to stay in their apartments and rental homes, many are turning to bankruptcy to stop their own rental recessions. If you too have been effected by the economic crisis, knowing a qualified bankruptcy attorney can also help you to conquer your creditors and face your landlord, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future beyond our own “Great Recession.” The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-888-234-4181, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.