Do I Need to Pay Rent if I File Bankruptcy in New York City?
If you decide to file bankruptcy in New York City and wish to vacate your apartment you can do so without having to pay for the remaining months on the lease. You will be off the hook for any rental arrears that may have accrued over the past months as well, but timing your move with your bankruptcy is very important. Only the rent owed before filing will be discharged in your case, so your landlord could legally come after you for any rental payments owed post filing. So if you are planning to leave you should do so at the same time you file bankruptcy. If you wish to stay in your apartment after bankruptcy on the other hand then you may need to address the rent going forward in your bankruptcy case. Fortunately bankruptcy has a built in mechanism for helping you get caught up on your rent and keeping you in your apartment.
Bankruptcy provides an “automatic stay” that prevents a landlord from evicting a tenant while in bankruptcy. To remain in your apartment you will need to start paying your rent again and will need to pay any arrears as well, but since the vast majority of your other debts will be eliminated finding the money to pay for rent will be much easier. If you are current on your rent and continue paying on time you should have no problems with your landlord as they will typically never learn of your bankruptcy filing.
A good apartment in New York City is hard to find, and many of our clients hope to keep their apartment when filing bankruptcy. We always help our clients keep their homes when, but if you have a rent stabilized lease there is an added complication even though you may be current on rent. Since many rent stabilized tenants are paying far below market value for their apartment some bankruptcy trustees are now considering these leases as assets that can be sold off to pay your creditors. Many landlords will pay top dollar for the ability to bring in a new tenant that will pay a higher rent. This means that even if you are current on your rent you could still be evicted if you live in a rent stabilized apartment when filing bankruptcy. Not all trustees believe in this practice. Many actually find it against the very nature of bankruptcy relief to give a debtor a fresh start on the street, but it is happening in New York City nevertheless.
Filing bankruptcy is a big decision. Moving is also a big decision. Before doing either consult a bankruptcy attorney. Bankruptcy is the most powerful and complete debt relief solution and the only debt relief option with the full power of law. It will help you keep an apartment even in a rent stabilized situation but you need the help of a qualified bankruptcy attorney. If you live in New York City contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free bankruptcy consultation today. We know what to expect before filing your case. We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.
**** DISCLAIMER: This article is intended for educational purposes only. By reading no attorney-client relationship has been created. Prior results do not guarantee a similar result for future clients.