Are you now facing an old apartment lawsuit for a broken lease? Have you moved out of an apartment and still owe rent? There are lots of reasons to move out of an apartment without paying all of the rent that was contractually due: unsafe or unsanitary conditions, call to military service, realizing you’re living in an illegal unit, breaches of landlord-tenant warranties, job loss, or domestic violence can all lead to a broken lease. Did you move out of an apartment several years ago and your former landlord is just now getting around to suing you? You should either settle the debt or discharge the debt in bankruptcy.
The Bankruptcy Discharge
Bankruptcy Code Section 362 (the automatic stay) prevents a landlord from either evicting a tenant or terminating a lease upon the filing of the bankruptcy. But that is for tenants still living the in property.
If you moved out of an apartment or house prior to the end of the lease term (a broken lease), in many cases your former landlord will sue you for the balance of the rent for the lease term. Discharging past-due rent in a Chapter 7 or Chapter 13 bankruptcy will eliminate your responsibility for that debt. Obviously, bankruptcy is a big step, and you should carefully consider the pros and cons with an experienced bankruptcy attorney before you file. In most cases, though, the debt from a broken lease will be treated as an unsecured non-priority claim and will be discharged with your bankruptcy.
Be aware, however, that if you remain in the property beyond the date of the filing of the bankruptcy, you may be responsible for the amount of the rent until you actually vacate the property. Rent that accumulates post-bankruptcy will not be discharged in the bankruptcy, and your landlord will attempt to collect on this rent. Timing of a move to another property therefore becomes an issue for those who are seeking to discharge past rent due.
Settle the Debt
Once you have been sued, you are no longer facing the landlord, but the landlord’s attorneys, who usually specialize in real property management, landlord-tenant, and collections law. If you do not want to file for bankruptcy protection, you should consider hiring an attorney to settle a debt for a broken lease. Bankruptcy attorneys are very good at this.
Defenses and loss mitigation are important if you want to reduce your liability under the lease, which is a legal, contractual agreement that calls for payment of rent in exchange for use of property. Review of lease provisions frequently benefits the tenant during negotiations of repayment for past-due rental obligations.
Landlords cannot simply sit back and wait for the term of your lease to end, then rent the apartment and sue you for the months you didn’t live there. Instead, once your landlord has a broken lease property, he or she must take reasonable steps to re-rent your apartment and reduce your lease balance by the amount received from the new renter. The landlord has a duty to mitigate his or her damages.
Often it is in the best interest not only of the renter but the landlord as well to settle the debt quickly and without resort to litigation. Consult with an attorney to determine whether you have recourse to arguments that may reduce the amount you owe.
Get Another Apartment
Most landlords run credit checks, and buildings you attempt to rent from in the future will be able to see your past rental activity, including a broken lease, any time over the last 10 years. Keep in mind that both missed rent and a broken lease, especially in larger buildings and communities, will be reported on your credit report. Evictions and lawsuits add additional negative marks to your credit. If you suspect that your former landlord is attempting to collect from you, run your credit report immediately, and attempt to resolve the situation before you get any damage to your credit. No bankruptcy exists in a vacuum, and many landlords consider the context of a potential renter’s financial history.
In my experience, the people who need to move out of an apartment are doing so because of circumstances beyond their control: job loss, illness, death, divorce, or uninhabitable conditions. Every situation is different. Tell me your story and I’ll tell you if I can help.