Filing for bankruptcy can be a stressful decision, especially for those renting a home. Many renters worry about losing their current home or facing difficulties when searching for a new place to rent.
However, understanding how bankruptcy actually impacts a rental situation can help ease these concerns.
Bankruptcy protection for renters
When you file for bankruptcy in Massachusetts, an automatic stay goes into effect. This stay temporarily stops creditors from taking any action against you. This protection extends to eviction proceedings. If you have fallen behind on rent, this pause can provide a little breathing room. However, the automatic stay does not give renters a free pass to stay indefinitely without paying rent. The landlord can ask the court to lift the stay to continue eviction proceedings if there is a valid cause, such as in the case of unpaid rent.
Eviction for filing bankruptcy
Filing for bankruptcy alone does not provide a reason for eviction. However, if the renter is behind on rent payments or has violated the lease in other ways, the landlord may still pursue eviction. In Massachusetts, landlords must follow specific legal procedures to evict tenants, even during bankruptcy. You should continue making rent payments if possible to avoid eviction during and after the bankruptcy process.
The effect of bankruptcy on renting a new home
Filing for bankruptcy can impact your ability to secure a new lease after the process is complete. Many landlords in Massachusetts check credit reports before approving rental applications. A bankruptcy can stay on a credit report for up to ten years and may cause some landlords to hesitate when considering an applicant. However, you can improve your chances by offering a higher security deposit or demonstrating proof of stable income.
Renters filing for bankruptcy in Massachusetts may not automatically lose their homes, but it is essential to understand how bankruptcy affects the situation. Keeping up with rent payments, understanding the landlord’s rights and preparing for future rental applications can help make the process smoother.