Can I Keep My Apartment In Chapter 7?

Yes, you can keep your apartment in Chapter 7. You will need to stay current on rent, but you can keep it. In other words, the fact you filed Chapter 7 does not give the landlord the power to evict you. Lastly, Chapter 7 will actually give you the power to get out of your lease if you would like to. This article addresses concerns regarding rental property in Chapter 7.

Should I Keep My Apartment In Chapter 7?

Sometimes, rather than ask “Can I keep my apartment in Chapter 7,” you want to ask “SHOULD I keep my apartment in Chapter 7?” When you’re filing Chapter 7, it’s a good time to reconsider your housing situation. Sometimes the cost of your monthly rent is prohibitive and the only reason you’re still paying it is because you’re afraid of breaking the lease. If that’s the case, Chapter 7 gives you the opportunity to walk away from the contract.  If you do walk away from the apartment contract, any unpaid rents are discharged in bankruptcy. This is called Rejection Of The Lease.

Rejection Of The Lease

Rejecting a lease in Chapter 7 starts by listing the lease on Schedule G. You then simply check the box indicating you would like to reject the lease. This means that you want any unpaid rents treated as unsecured debt, and discharged in the bankruptcy. Keep in mind your security deposit can be held by the landlord to offset unpaid rents; however, the landlord will not be entitled to anything else from you.

Vacating The Premises

You should cooperate with your landlord and vacate the premises if you plan to reject the lease. If you do not vacate the premises in a timely manner, you should expect the landlord to begin official eviction proceedings. Again, this is only if you are rejecting the lease in your bankruptcy filing.

Assumption Of The Lease

If you would like to remain in the apartment or rental unit, you will elect to Assume the lease. This means that you will owe the landlord any back rent, together with ongoing and future rents. Generally, the landlord will present you with a new contract to sign after you file bankruptcy. By signing this new contract, you are re-affirming your agreement with your landlord. Be careful before you do so, as the filing of your bankruptcy is your chance to walk away from the contract if you like.

Renting An Apartment After Bankruptcy

Keep in mind that after you file bankruptcy, you will have it on your credit report. Apartment complexes of course will run a credit check prior to signing a new apartment lease with you. We always ask clients to call us if they have any trouble leasing a new apartment. It is rare that we receive a call. One theory is that so long as you have employment and a security deposit to put down, the new apartment complex is comfortable renting to you. They also know you can’t file bankruptcy because you recently filed. This actually protects the creditor/landlord.

Further Reading

Many of the same rules for apartments apply to keeping a car in bankruptcy. Additionally, if you own a home, you can read about keeping your home in bankruptcy.

Speak With A Charlotte Bankruptcy Lawyer Today

If you have questions about bankruptcy, call us. If you want an answer to the question “Can I keep my apartment in Chapter 7,” we can help. You can reach us at 704.749.7747 or click for a FREE CASE EVALUATION and we will call you back today. We know you have options. We hope you choose to Recover With Us.