Chapter 13 Bankruptcy Rent to Own Program

If you are filing a chapter 13 can you still do a rent to own program?

2 Answers

This will depend on the person with whom you are going to enter into a contract to rent-to-own with.

If they understand the legalities of lending to someone in a chapter 13, I don't see why not if they are ok with the risk level.

However, the courts may have a different opinion and I believe before you can take on a new debt you will need permission from the courts so I would first contact your trustee, or whomever is administrating your chapter 13 and ask them if you can, and if so, what, if anything, do you need to do in regard to making sure you don't create an issue with your bankruptcy.

Please call your trustee or attorney for any legal opinion.


During the filing process, this would not be possible due to the courts disclosure requirements on income and expenses.  After a chapter 13 plan has been approved by the bankruptcy trustee, it would be possible under limited circumstances.

A chapter 13 bankruptcy requires that 75% of your disposable income after your declared expenses is paid to secured/unsecured creditors.  This leaves precious little toward discretionary expenses.  If your proposed housing expense on the rent to own program is less than your current housing expense, than this is a possibility.  If the rent to own situation took you to 100% of your disposable income, this would also be allowed. 

The trustee always has final say on any new financial obligation you enter in to.  If the situation did not make sense to them, it would be declined.  There would need to be a reason for the housing change such as increased family size or job relocation.  Since chapter 13 plans are re-evaluated annually for income and expenses, simply having more money available would not be a reason.  The trustee would increase your payment schedule to creditors if additional capital was available.

There is no provision in the current bankruptcy law; however, to prevent you from gaining an equity position in a home under a rent to own plan.  This scenario would need to be discussed with your bankruptcy attorney and then the trustee of your plan.