How bankruptcy helps with evictions and unpaid rent in Massachusetts.
The eviction moratorium is ending and unpaid rents are due. How does bankruptcy help?
Generally, in most cases, a person threatened with eviction can move to a new place, list the past due rent in a bankruptcy petition and wipe out the unpaid rent.
Most people qualify for a basic Chapter 7 bankruptcy. In a Chapter 7 bankruptcy, tenants in debt and an evicted person can list their debts, including unpaid rents, and all of those debts are wiped out except for certain priority debts like taxes, criminal restitution, child support, alimony and student loans. Unpaid rents are the kind of debts that are wiped out.
The unpaid rent can also be wiped out in a Chapter 13 bankruptcy.
Bankruptcy can help with evictions in Massachusetts for unpaid rent. Here are a few different choices:
Eviction proceeding not filed yet then property owners cannot evict a person for unpaid rent. The bankruptcy automatic stay protects a renter from eviction for as long as it is in effect. When bankruptcy is filed before the eviction is filed a party involved in an eviction is protected. The landlord will need to file a motion to lift the automatic stay. This would remove the bankruptcy protection and then the property owner can evict a tenant for unpaid rent. A renter would still owe rent for the time a tenant occupied the home after filing bankruptcy until the tenant moves out.
Example: rent has not paid due to the pandemic. Tenant moves to a new home. Past due rent scheduled in the bankruptcy. Unpaid rent subject to bankruptcy discharge. Fees subject to bankruptcy discharge. Costs subject to bankruptcy discharge. The bankruptcy does not affect the new rental agreement and the tenant can keep paying rent at the new home. In Massachusetts, bankruptcy can stop evictions for unpaid rent.
Eviction not presently allowed by a court. The bankruptcy court can protect tenants. A tenant must move out immediately if the court awards the landlord an eviction. This is if the tenant has not filed for bankruptcy protection and included the unpaid rent. This applies to Chapter 7 bankruptcy or Chapter 13 bankruptcy. If a renter is facing possible eviction consider filing bankruptcy before the eviction date to get the bankruptcy court protection. A tenant with unpaid rent will get more time in the home and allow the renter to search for a new rental property.
If the renter has not paid rent in a while and the tenant needs to file bankruptcy right away the tenant can file bankruptcy and wipe out those unpaid rent amounts. However the renter is liable for any fees, costs and expenses. Rent incurred from the day of the bankruptcy filing until the day property owners force tenants to move out. Unpaid rent is subject to bankruptcy discharge. The tenant will be responsible for any rent due after the filing of the bankruptcy.