In Oklahoma you can discharge past debt in bankruptcy. This includes both a chapter 7 bankruptcy and a chapter 13. Bankruptcy may be an option to discharge or reorganize your debts. But only specific types of debt can be discharged through bankruptcy. As you consider filing for bankruptcy, make sure the kinds of debt you want to eliminate are qualified and able to be discharged throughout the bankruptcy process. One of those types of debs can include past rent in bankruptcy.
Different Types Of Bankruptcy in Oklahoma
Depending on the type of bankruptcy you will be filing, your rental debt may or may not be discharged. The main two types of bankruptcy are Chapter 7 and Chapter 13. and the process for both is different.
Chapter 7 bankruptcy in Oklahoma
Chapter 7 is known as a liquidation case. This means you will have a bankruptcy trustee responsible for gathering and selling all “non-exempt” property and then using those proceeds to pay back your creditors. The good news is that in most chapter 7 cases all of your property is considered exempt and you wont lose it. Its important to consult an attorney about all the property that you have so that they can claim the exemption. Under Chapter 7, as a renter, you may receive a discharge of the rental debt owed for either houses, apartments, or cards, but you will also have to surrender the property to the creditor.
Depending on the agreement, you will likely have 30 days to leave or return the property. If you cannot pay the past rent and do not leave the property, landlords may ask the court to start eviction proceedings. This is why renters will limit their claim to past rent In bankruptcy.
Chapter 13 Bankruptcy in Oklahoma
In a Chapter 13 bankruptcy, the debtor just reorganizes the debt owed to all the creditors and then prepares a payment plan to repay the debts.
When filing a Chapter 13 bankruptcy, the renter will decide to keep or reject the lease. If you choose to keep the lease, you will be responsible for paying all past rent payments and the regular and ongoing monthly rental payments. If you fail to keep the rental payments current, the landlord may start an eviction proceeding. By rejecting the lease, you will not have to pay the outstanding debt, but you will also be required to leave the property. If you leave the property all of the past due rent is treated as unsecured debt. If this is the case depending on your budget you probably will discharge the vast majority of the past due rent.
Can Filing For Bankruptcy Stop An Eviction?
Filing for bankruptcy can potentially stop an eviction that is in progress and discharge your rental debt. For this to happen, it depends on the timing of the eviction and the timing of filing for bankruptcy. If a writ of eviction has already been issued before you filed for bankruptcy, the bankruptcy trustee and the court may decide that the lease was already terminated when you filed for bankruptcy. Therefore, you will likely still have to move out.
But, if the final order for eviction has not been issued, the bankruptcy may stop or delay the eviction process and allow you to stay in your home. But, in the event this is the case the eviction will only be delayed and any money owed for rent after the date you file will not be discharged in the chapter 7.
Which Is Better – Eviction or Bankruptcy?
Depending on the circumstances, bankruptcy may be more advantageous to your credit score than an eviction. Evictions can make it much harder to find another rental to live in or to obtain a mortgage to buy a house. Many times, especially in Chapter 13 bankruptcy, lenders may view the bankruptcy as “being financially responsible” and might be more likely to loan to you.
Evictions can stay on your credit report for up to seven years. Especially if a lawsuit is involved, it will be a public record and discoverable by any landlord that looks for it. To create the most advantageous situation for your financial future, you should talk to a bankruptcy attorney early in the process.
Tulsa Okla. Bankruptcy Attorneys Near You
Past due rent is a problem. Its not unusual that a landlord wont rent to you if you have past due rent judgements. Past rent In bankruptcy is forgiven and signals to the new landlord that you are serious about re-establishing yourself and your credit. Dealing with rental debt is scary during the bankruptcy process. Presumably, the place you rent is where you live, and the uncertainty surrounding how the process unfolds can be emotionally hard to navigate. Our attorneys can help you through the bankruptcy process and allow you to feel secure in your choice of legal representation. If you have past due rent the past rent in bankruptcy will be discharged. The attorneys at Kania Law Office are ready to help you and be there for you during challenging times. Call (918) 743-2233 today to schedule your appointment or contact us online.