There are many positives that come from a bankruptcy. While the connotation around a bankruptcy was once stigmatized, it now is more commonplace and accepted, especially with the volatility of the economic climate. You were not alone in believing the favorable economic temperatures would last, and the inclement weather had passed. The hot and cold nature of the economy has left many people floundering financially and looking for a way to find their feet and try again.
Many people have also seen their credit suffer from these trying times. If poor credit was already a factor that often means home loans were next to impossible to secure, and more people are renting instead of buying. However, if you are renting the home in which you reside, what will happen when you file for bankruptcy?
The first thing to understand is that the rent you pay for your residence is not going to be absolved through bankruptcy. It will still be a debt you are responsible for, should your desire be to remain a tenant of the residence. However, if you have fallen behind on your rental payments, bankruptcy may be able to help.
If you file for bankruptcy prior to missing or falling behind on payments, you will be able to place an automatic stay on the collection activities of the landlord. This means he or she cannot file to evict you. The tenant can ask the federal bankruptcy court if it can lift the stay. Unfortunately, if the landlord knows to do this, the judge is likely to approve because the value of the rental will not affect the valuation of your estate.
If you file for bankruptcy after a landlord has already begun the eviction process and has the judgment for possession as ordered by the court, the automatic stay will not prevent your eviction.
However, there are state laws that, in certain circumstances, will allow a tenant to remain on the property and “cure” the situation by paying the past due debts after filing for bankruptcy. By contacting a Florida attorney knowledgeable in bankruptcy you can begin to truly explore all of your options as a renter.