Chapter 13 bankruptcy is designed to help consumers with overwhelming debt. Even once you're on a Chapter 13 repayment plan, though, you'll still be responsible for ongoing housing costs, whether that's mortgage payments or rent. If you've gotten behind on your rent payments, it's important to understand how rent is treated in bankruptcy.

The Craig Black Law Firm specializes in bankruptcy filings and can help with any questions you have. If you're considering filing, why not go with a firm that offers a personal touch? When you call me at 678-888-1778 or fill out my confidential contact form, you'll speak to me directly.

Secured vs. Unsecured Debt in Bankruptcy

Bankruptcy courts separate debts into two different types:

• Secured debts: These debts are “secured” by collateral. A mortgage, for instance, uses your home as collateral, while a car loan uses your vehicle. These loans come with the understanding that if you fail to pay your debt, the lender has the right to seize the property.
• Unsecured debts: Some of your debt will fall in the unsecured category, which means no assets are used to promise you'll pay the debt. Unsecured credit cards and medical bills are examples of unsecured debt.

If you owe money for past rent payments, that debt qualifies as unsecured. Sure, your landlord can kick you out if you fail to fulfill the terms of your lease, which includes on-time rent payments, but the landlord cannot seize any assets to make up for the loss.

How Rent Arrears Are Treated

Most unsecured debt is discharged once you've completed the repayment plan. Rent, however, is handled differently from credit card and medical debt. Here's what the courts will consider:

• Current lease status: Do you plan to remain in the rental, or have you already exited? If you hope to stay, you'll need to make on-time payments while you're also paying the past-due rent through the repayment plan.
• Landlord's actions: Although filing for Chapter 13 bankruptcy temporarily stays any eviction proceedings, you'll need to repay your past-due rent by the end of your current lease. These cases are very difficult to get approved, so it can help to have experienced legal guidance.
• Repayment plan terms: Whether you're evicted or not, your past-due rent will be included in the repayment plan, and the court will decide how much of the rent will be included in those repayments. At the end of your repayment plan, any remaining past-due rent will be discharged.

How the Craig Black Law Firm Can Help

Budgeting for rent can be tricky, especially when you have mounting debt. Before filing for Chapter 13 bankruptcy, it's important to make sure you can keep up rental payments. The Craig Black Law Firm has experience with renters who are also filing for Chapter 13. I can review your situation and advise you on the best course of action. Call me at 678-888-1778 or fill out this confidential form.