Did you know that the coronavirus eviction moratoriums do not equate to rent forgiveness?
That means that renters have to pay all their back rent and any late fees or penalties before the eviction moratorium ends. Once the eviction moratorium is over, the landlord can evict the tenants if they are not current. Neither the eviction moratorium enacted by the CDC nor the Arizona state moratorium forgive back rent, late fees, or penalties.
Therefore, tenants could end up owing a large sum of cash. For example, if rent is $1,500 a month and the tenants couldn’t pay for six months during the moratorium period, they could have to come up with $9,000 or more (if late fees and penalties are charged) in order to avoid being evicted. This bill will come due before the moratorium is lifted, whether that’s December 31st or whatever other date the government chooses.
This could be very difficult to pay, given the eviction moratoriums are for tenants who meet criteria such as loss of income due to the pandemic, annual salary below a certain amount, giving landlords written notice, and applying for rental assistance programs.
However, back rent, in most circumstances can be discharged in bankruptcy!
Discharged means the money will no longer be owed. A “Fresh Start” to move forward.
A FREE Confidential Consultation with Bona Fide Bankruptcy Attorneys can help wipe out debt and discharge back rent. Begin preparations now by contacting us to learn your rights and find the best way to position yourself for the future. This depends on knowing the intricacies of the law and the facts of the particular situation.
For example, once a bankruptcy is filed, an “automatic stay” goes into effect, which will allow tenants to live where they are until their cases are completed. This stops landlords, as well as all other creditors, from taking any action to “collect, assess or recover a claim against the debtor that arose before the commencement of the case.” This gives tenants much-needed time to find a place to live while the bankruptcy is pending. All of the back rent can be discharged in bankruptcy.
Also, depending on whether the landlord decides to seek a “lift” on the automatic stay, a tenant might live in the rental without paying rent until the bankruptcy is concluded, up to three more months.
Finally, if a renter rejects the lease during the bankruptcy process, then the tenant/debtor is not obligated to continue paying rent and past rent could all be discharged in the bankruptcy.
On the other hand, some landlords may work with tenants by letting them pay the back rent in installments, to encourage them to stay. Plus, if a tenant is getting governmental rental assistance, the landlord will already have been paid a portion of the rent.
Either way, Bona Fide Bankruptcy can give you the information and advice you need in order to decide how to proceed during this time of coronavirus.
In the midst of the COVID-19 pandemic, individuals need to take advantage of their legal possibilities, protections and rights, and Bona Fide Bankruptcy has the skilled attorneys who can help you and your family gain valuable time during the eviction moratorium, and discharge back rent along with other debts.
Bona Fide Bankruptcy understands that every client and situation is unique. We believe in a holistic approach and will take the time to listen to your issues and help you develop the best legal strategies.
If you have an issue with an eviction or would like to undertake financial planning in these uncertain times, contact Bona Fide Bankruptcy for your FREE Confidential Consultation, at (480) 477-3208, or fill out our contact form.
We are licensed in Arizona and practice bankruptcy law in Tempe, Mesa, Chandler, and Phoenix. Article written by Kim R Brown and Emile J Harmon, Attorneys at Law.
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*Our firm practices bankruptcy law and is considered a debt relief agency by federal law. We help people file for bankruptcy relief under the Bankruptcy Code.
**Disclaimer: This article provides general information and should not be taken as legal advice. Answers to questions or comments do not form an attorney-client relationship.