Rental Scam Is A Reminder That Bankruptcy Can Help With Rent Problems
Now that the moratorium on evictions has ended in most states, including Florida, people who are behind on their rent may be facing eviction, wondering where they will go next. For many, even if they are once again employed, the months of missed rent while COVID kept them out of work is way more than they can afford to pay at once, in order to get their rent current.
Adding insult to injury for some people is a new rash of landlord scams—people praying on those who are evicted, and who have no place to go.
People Who Rent, But Don’t Own the Property
The scam goes something like this: Someone offers you a place to live, often on a rent-to-own basis. That means that the payments that you are making towards your rent are also going towards a down payment or partial payment on owning the home.
At the end of the lease term, you have a right to purchase the home–or, perhaps, if you have paid enough through your rent, you actually already own the home, having paid what the home is worth.
These “rent to own” arrangements have been around for a long time, and there is nothing inherently fraudulent about them. But there, the catch with this current scam is that the person renting the property doesn’t actually own the property, and obviously has no right to sell the property.
The money that has been paid for rent has not gone towards anything. Thus, people who think they now own their home (or have the right to buy it) in fact own nothing.
Who is Doing This?
Often, the scammers may be people who were foreclosed on, but who continue to live in the property. They pretend they still own the property, and rent it out to unsuspecting tenants. In other cases, the scammers are complete strangers to the (often abandoned) property, who get locks and act like the property is theirs to rent or to sell.
Bankruptcy Can Help
Many of these victims don’t realize that if they are behind on rent payments to their landlord, bankruptcy can be a viable option for them.
You will have to pay your continuing lease–that is, rental payments that come due from the time you file forward. The automatic stay that happens as soon as you file for bankruptcy will put a hold on any collection or eviction efforts by your landlord in the event that you are behind on your rent at the time that you file for bankruptcy.
If you are behind on lease payments, you will need to pay whatever is owed, or else, try to work out other options with your landlord. However, if you can do that or work something out, you will be able to avoid eviction.
However, things are different if your landlord has already gotten an eviction judgment. So, if you feel like or know that eviction action is imminent, you should talk about your bankruptcy options immediately.