Bankruptcy options available to financially distressed renters with eviction moratorium set to expire this month

Posted on July 12, 2021 at 11:15am by

The Centers for Disease Control (CDC) recently announced that they were extending the moratorium on evictions for another month to July 31. However, the CDC also announced that this would be the final extension of the moratorium. With the COVID-19 pandemic wreaking havoc on many people’s finances, this is short-term welcome news for tenants who are worried about eviction.

However, it is important to know what the moratorium actually means and to plan ahead for when it ends.

The words “moratorium” or “ban” can be somewhat misleading, as it makes it seem as if everyone is protected — but really, not everyone is covered and there are steps you need to take to be protected. The CDC has produced a form that you have to fill out and provide to your landlord. If your landlord has filed an eviction suit against you, you should provide a copy of the form to the court as well.

On the form, you will have to explain that you:

  1. Make a certain amount of money, or received certain benefits
  2. Cannot make your rent payments and why
  3. Have done your best to make partial payments as you can
  4. Have done your best to get government assistance for rent
  5. You will have to move in with others if evicted

It is also important to know that the moratorium does not cancel your rent; it only prevents you from being evicted if you meet the criteria. Once the moratorium ends, you will still owe any rent that has not been paid.

At that point, state law will determine whether your landlord can evict you. In Missouri, a landlord will be able to file a Rent and Possession action if you are behind in your rent. In Kansas, a landlord can file an eviction after giving you a three-day notice to get current in your rent.

If you will be past due in rent, or can no longer afford your rent, bankruptcy can provide you relief.

While bankruptcy does not prevent evictions, it does allow a renter to reject an unaffordable lease, including the past due rent, and provides a good way to wipe out other debts and get a fresh start. So, if you have decided to move and are concerned about the remaining term on the lease, a bankruptcy will keep your landlord from pursuing any past-due rent. If you can afford ongoing payments and want to keep your lease but cannot afford the past due rent, a Chapter 13 bankruptcy can be used to pay the past due debt over a period of time, with the consent of the landlord.

If you are interested in talking to a bankruptcy attorney about whether a bankruptcy is a good option for you, please call us at 816-561-1818.

Sader Law Firm associate attorney James Boyce authored this post. He can be reached at jboyce@saderlawfirm.com.