You are struggling to pay your bills and make ends meet. Despite great effort, you are falling behind on rent. You worry that your landlord might pursue eviction if you are unable to pay soon.
The last thing you need while trying to get back on your feet financially is to lose your living space. A bankruptcy attorney can help you determine if filing for bankruptcy is a practical decision for you.
The difference between Chapter 7 and Chapter 13 bankruptcy
The most significant difference between Chapter 7 and Chapter 13 is income level. Chapter 7 bankruptcy is appropriate for people with unmanageable debts and no significant assets. Only people that fall below a certain income level are eligible for Chapter 7. Chapter 13 bankruptcy is appropriate for people with regular income who have unpaid bills and debts piling up. If you file for Chapter 7 but your income is high enough to qualify for Chapter 13, the court may dismiss your case or convert it to Chapter 13. A skilled bankruptcy attorney can help you determine which type of bankruptcy filing is correct for you. In both types of bankruptcy, some debts must be repaid according to which type of bankruptcy you file.
How bankruptcy can stop creditors
Upon filing for bankruptcy, you must submit several financial documents including tax documents, proof of income, lists of assets and information regarding all creditors to the trustee appointed to your case. When you file for bankruptcy, an automatic stay applies immediately. The stay stops collection efforts from all creditors, including landlords and mortgage companies. The bankruptcy clerk notifies the creditors for you. Keep in mind that it does not erase the debt, nor is the stay permanent. It only pauses the collection efforts for a set amount of time.
Many people are hesitant to file for bankruptcy because they are afraid it will actually trigger an eviction. No matter the language in your lease, your landlord cannot evict you solely for filing for bankruptcy. A lease provision that allows for eviction if you file for bankruptcy is legally unenforceable.