Individuals facing insurmountable debt and needing to file bankruptcy often wonder what will happen to their home leases when they file chapter 7 bankruptcy. Luckily, the United States Bankruptcy Code affords an individual flexible options for dealing with leases in 
bankruptcy.
Generally, when a person files chapter 7 bankruptcy, he or she has the option to either assume or reject all leases and unexpired contracts. When someone “assumes” a lease, it generally means that he or she wants to continue the lease and keep making the normal contractual payments. This is the ideal option for an individual who is current on lease payments when the case is filed and wants to stay in their residence without interruption.
However, the Bankruptcy Code affords individuals another option – to “reject” a lease. In certain instances, a rent payment is too high or an individual simply wants to move. To accomplish this, someone filing chapter 7 has the option to “reject” or discontinue the lease without any further liability.
In either situation, the person filing bankruptcy is required to file a document with the Court titled a “Statement of Intention” which states whether that individual wants to assume or reject the lease.
If you are considering filing for Chapter 7 Bankruptcy and have questions about your lease, or to discuss your options, please contact Vik Chaudhry at the VC Law Group on our website, via phone at (858) 519-7333 or via email at info@thevclawgroup.com.