I am getting ready to file for ch.7. Would prepaid rent be considered an exempt asset?

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I am getting ready to file for ch.7. Would prepaid rent be considered an exempt asset?

I have to move and have had a very hard time finding a landlord that will give me a lease given my current financial condition. I have found one who will rent to me but wants 6mos. rent in advance. Would the prepaid amount be part of my “wild card” exemption?

Asked on May 8, 2009 under Bankruptcy Law, Washington

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Could possibly be. It isn't about that it is pre-paid -- the court really cannot undo this contract -- it is the intent on contracts =-== i.e., I don't think your intent is to hide assets.  Therefore, I don't think it will be an issue.  Are you filing pro se or do you have a lawyer?

The automatic stay will usually preclude you from being evicted from your apartment, anyway.  In other words, if you owe back rent, that is stayed.  Even if discharged, you will still owe for new charges (after you file bankruptcy).  So those rents you don't pay after you file will subject you to eviction. Thus, why the landlord is asking for 6 months up front =--- think of it as a favor.


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