Bankruptcy – Can I Get Out of My Lease By Filing?

Filing bankruptcy in Georgia can get you out of your lease (see section 365 of the Bankruptcy Code).  The only way you can be held liable in Georgia for a lease after you file for bankruptcy is if you specifically assume the lease in writing after your case is filed.  If you continue to occupy the premises after filing, you may be held liable for post-petition rent.

I recently spoke with a client in my Rome GA office who was in a bad housing situation.  She rented this house in a nice neighborhood and signed a two year lease.  After moving in, she discovered that the house was infested with fleas.  Since she has no animals, the problem clearly existed before she moved in.  To her horror, her two small children got chewed up with flea bites.  The problem was so bad that she had to move into a hotel for the safety of her children.  Three trips from pest control company failed to cure the problem.  The thought of being stuck with this lemon of house for two years caused her to panic.  Fortunately, she was already planning on filing for bankruptcy before this problem arose.

She called my office in tears asking if filing Chapter 7 would get her out this lease so that she can move to a better house.  The answer is yes.  Rejecting the lease in a Chapter 7  will not be a problem.

I encouraged her to go ahead and find another place to live before we file her case.  Finding a nice house to rent in the Rome Georgia area is not difficult in the current market.  However, filing bankruptcy is a matter of public record and some Georgia landlords might be hesitant to rent to someone who just filed bankruptcy.

Leases can also be rejected in Chapter 13 plans.  In zero percent Chapter 13 plans, any deficiency from the lease will be wiped out.

Other Posts:

1. What is Chapter 13?

2. What is Chapter 7?

3. How much does it cost to file in Georgia?

4.  Stop Garnishment in Georgia


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