How the CDC’s Eviction Moratorium Can Help If You Are Struggling to Pay Rent Due to COVID-19
As the COVID-19 pandemic–and its associated economic impact–continues to ravage Iowa, many people continue to find themselves falling behind in their rent. To help alleviate this problem, the U.S. Centers for Disease Control and Prevention (CDC) issued an order in September placing a temporary halt on residential property evictions through the end of 2020. But what does this mean in practical terms? Do you still have to pay any back rent owed? And what happens when the new year comes around?
First, let’s make it clear that the CDC’s order only prevents landlords from evicting a tenant for non-payment of rent. The order does not otherwise alter or abolish the tenant’s obligation to pay said rent. Indeed, the order makes it clear a landlord can demand payment of all back rent after December 31, 2020, including any “fees, penalties, or interest for not paying rent” provided under your lease.
Second, in order to receive protection under the CDC order, you must file a written “declaration” with your landlord. The Iowa Supreme Court has provided a form you can use for this declaration. This is the only action you need to take. Keep in mind, the declaration requires you to certify–under penalty of perjury–that you are eligible for protection under the CDC order. Fortunately, the CDC defines eligibility quite broadly to include individuals who meet the following requirements:
- You do not expect to earn more than $99,000 in 2020, or more than $198,000 if you are filing a joint tax return with your spouse.
- You are unable to pay your rent due to a substantial loss in household income, a reduction in your hours worked or wages, a layoff, or you have incurred extraordinary and unreimbursed medical expenses exceeding 7.5 percent of your adjusted annual income.
- If evicted, you face either homelessness or the prospect of having to “live in close quarters” in a new shared housing situation.
How Chapter 13 Bankruptcy Could Help You Catch Up on Missed Rent Payments
So what should you do if December comes and you are still unable to get current on your rent? One option may be to file for Chapter 13 bankruptcy protection. Unlike the CDC eviction moratorium, bankruptcy provides a means for getting current on your debts while continuing to protect you from potential eviction.
In a Chapter 13 case, you must submit a plan to the bankruptcy court for repaying your creditors over time, usually between 3 and 5 years. This plan can include back-owed rent. Of course, you will still need to keep current on any new rental payments moving forward. Once approved by the bankruptcy court, your landlord is required to accept the terms of your repayment plan and cannot take any further eviction action.
It is also worth noting that in a Chapter 13 case, you also have the option of rejecting your lease. So if you are looking to get out of a bad rental arrangement altogether, you may be able to do so.
Of course, you should always consult with a qualified Southeast Iowa Chapter 13 bankruptcy lawyer before taking such steps. At the Noyes Law Office, P.C., our compassionate bankruptcy attorneys can review your situation and advise you on the best course of action. Contact us today to schedule a consultation.