Legal Question in Bankruptcy in Wisconsin

Rental Housing After Bankruptcy and Options to Purchase

Bankruptcy generally does not affect a residential rental tenancy following conclusion of the debtor's bankruptcy case. Continued right to tenancy following bankruptcy usually depends most upon whether the debtor pays the landlord and otherwise complies with all the other conditions of the lease. If there is no lease, however, a landlord can always terminate a tenancy with proper notice. An option to purchase a rental property generally should not be affected by a bankruptcy so long as the tenant has not defaulted on any obligations. It is important; however, for the tenant to declare the option to purchase as an exempt homestead, otherwise the bankruptcy trustee can exercise the option and evict the tenant. The tenant's credit worthiness generally is damaged by a bankruptcy, making it more difficult for a tenant to get financing if he tries to exercise an option to purchase. However, a person with sufficiently terrible credit can sometimes actually improve it with a bankruptcy, assuming that it was originally so bad that it could not possibly have gotten any worse.