Landlord Bankruptcy Clause

A lease is automatically void when it is against the law, such as a lease for an illegal purpose. In other circumstances, like fraud or duress, a lease can be declared void at the request of one party but not the other.

Your landlord will be notified of your case, but it should not affect your lease. To learn more about how leases are handled in a Chapter 7 bankruptcy, check out our Guide to Leases in Bankruptcy.

Failure to pay the rent on time and in full. Allowing more than the stated maximum number of occupants to live in the property. Sub-letting a room or the entire property without the landlord's permission. Decorating or conducting building works at the property without the landlord's permission.

If the debtor files while the lease is unexpired, then the bankruptcy court can deal with it; otherwise, it can't. If a lease has terminated by its terms before the bankruptcy filing, then there is nothing to assume (or reject).

Tell the landlord why you filed for bankruptcy, if a bankruptcy appears on your record. If it was a result of a failing business or unexpected medical expenses, the landlord might take this into account if in the meantime you've attempted to repair your credit by paying all your bills on time.

If your rental payments are current, getting debt relief by filing bankruptcy will not affect your lease agreement.

Prepare your profile by adding a letter outlining your current financial circumstances, especially if you know your credit score may hamper your rental approval. Be businesslike in the letter and offer a clear explanation of the circumstances that led to your financial difficulties.

Rejection of a lease means that the lease is breached, the debtor tenant has to vacate the property, and the landlord can file a claim against the debtor's estate for the amount of any past or future rent.

Whether or not you filed for bankruptcy does not necessarily affect your ability to pay your rent, but the amount of income you have to put toward your rent does. If you're earning enough to pay your rent, a landlord is less likely to consider your bankruptcy, especially if your income has increased since you filed.