Paying Delinquent Rent During Bankruptcy
Many renters filing Chapter 13 bankruptcy
find themselves owing several back months of rent; plus other unsecured debt. When handling the repayment of delinquent rent during bankruptcy the debtor should work with their bankruptcy attorney to create a written agreement with the landlord to repay the rent over the first few months of the bankruptcy.
Be forewarned that bankruptcy trustees might object if you simply repay the back rent post-bankruptcy because it will appear that you are giving preference to one creditor over another. Of course, we know that rent is a special case because if you don't pay the landlord can evict you. However, it is important that repayment is handled within the rules of bankruptcy to avoid an objection from the bankruptcy trustee or other creditors.
Most likely your bankruptcy attorney will argue that it is essential that you repay your rent in full because if you don't the landlord would evict you which would of course defeat the purpose of bankruptcy. After the back rent is repaid the bankruptcy trustee may demand that you continue to pay that "extra" money to other creditors in Chapter 13 bankruptcy. A debtor and his/her bankruptcy attorney might argue that the money is needed for estimated increases in living expenses in the future (i.e. increases in rent, car repair etc.) To find out more about your bankruptcy options, please contact a Dallas-Fort Worth bankruptcy attorney today.