How Does Bankruptcy Impact My Rental Agreement in Massachusetts?

When you file for bankruptcy in Massachusetts, it can have a significant impact on your rental agreement. Bankruptcy laws seek to offer relief to people who cannot meet their debt obligations, including debts owed to landlords.

Under Massachusetts law, when you file for bankruptcy, an “automatic stay” is put into effect. This is a legal provision that temporarily halts all collection activities against you, including eviction proceedings. However, it’s important to note that the automatic stay does not absolve you of your obligation to pay rent. It merely pauses any ongoing eviction proceedings and prevents your landlord from starting new ones.

If you are late on rent when you file, your landlord may file a motion to lift the automatic stay and continue with the eviction process. If the court grants this motion, you could be evicted even while your bankruptcy case is still pending.

What Happens to My Lease if I File for Bankruptcy?

The impact of bankruptcy on your lease largely depends on the type of bankruptcy you file. In Massachusetts, individuals typically file for either Chapter 7 or Chapter 13 bankruptcy.

In a Chapter 7 bankruptcy, you can choose to either “assume” or “reject” your lease. If you assume your lease, you are agreeing to continue making your rent payments and abide by the terms of your lease. If you reject your lease, it’s considered a breach of contract, and your landlord can take possession of the property. However, any unpaid rent that accumulated before you filed for bankruptcy will be discharged.

In a Chapter 13 bankruptcy, you can include your past-due rent in your repayment plan. This allows you to pay off your rent arrears over a period of three to five years while continuing to make your current rent payments. If you successfully complete your repayment plan, any remaining rent arrears will be discharged.

What Are My Rights as a Tenant After Filing for Bankruptcy?

As a tenant who has filed for bankruptcy in Massachusetts, you have certain rights that are protected under the law. First and foremost, you have the right to continue living in your rental property as long as you continue to pay your rent on time and comply with the terms of your lease.

Even if you are late on rent, filing for bankruptcy triggers an automatic stay that temporarily shields you from eviction. However, this safeguard is not foolproof. If your landlord obtained a possession judgment before you filed for bankruptcy, the automatic stay won’t prevent your eviction.

You have the right to either assume or reject your lease if you file for Chapter 7 bankruptcy. If you choose to assume your lease, you must cure any default and provide adequate assurance of future performance. If you reject your lease, any unpaid rent will be discharged, but you will likely have to vacate the property.

In a Chapter 13 bankruptcy, you have the right to include your past-due rent in your repayment plan, allowing you to catch up on your rent over time while continuing to live in your rental property.

Can My Landlord Discriminate Against Me Because I Filed for Bankruptcy?

Under Massachusetts law, it’s illegal for landlords to discriminate against prospective tenants solely because they’ve filed for bankruptcy. This means that a landlord cannot refuse to rent to you, charge you a higher rent, or impose more stringent lease terms just because you have a bankruptcy on your record.

However, landlords are allowed to consider your credit history when deciding whether to rent to you. If your bankruptcy has resulted in a poor credit score, this could potentially impact your ability to secure rental housing.

What Can You Do If You Face Discrimination?

If you believe a landlord is discriminating against you based on your bankruptcy status, there are steps you can take. First, you should gather any correspondence or documentation that shows evidence of discrimination. This could include emails or written communication where the landlord makes a direct reference to your bankruptcy as the reason for the adverse decision.

Next, consider filing a complaint with the Massachusetts Commission Against Discrimination (MCAD). This state agency enforces anti-discrimination laws and can investigate your claim to determine if the landlord has violated your rights. Filing such a complaint can also help deter landlords from engaging in similar discriminatory practices in the future.

Additionally, seeking legal counsel from an attorney who specializes in tenant rights can provide you with guidance and potentially strengthen your case.

How Can an Experienced Attorney Help Me Navigate Bankruptcy and Rental Issues?

A talented attorney can help you understand your rights and obligations under Massachusetts law, advise you on the best course of action based on your specific circumstances, and represent your interests in court. They can also negotiate with your landlord on your behalf, potentially helping you avoid eviction or secure more favorable lease terms.

Additionally, a skilled attorney can help you navigate the process of bankruptcy, ensuring that you make informed decisions that protect your financial future. They can help you understand the implications of assuming or rejecting your lease, guide you through the process of creating a repayment plan, and ensure that you take full advantage of the debt relief options available to you.

If you’re dealing with the impact of bankruptcy on your rental agreement or lease, call Benner Law today at 774-228-7338 for a free consultation.