Can Filing For Bankruptcy Stop An Eviction?

Filing for bankruptcy can temporarily stop an eviction action due to the automatic stay that goes into effect immediately upon filing. However, the effectiveness of bankruptcy in stopping an eviction depends on several factors, including the stage of the eviction process and the specific circumstances of your case. Here’s how it works under Chapter 7 and Chapter 13 bankruptcy:

Chapter 7 Bankruptcy and Eviction

• Temporary Relief: The automatic stay in Chapter 7 bankruptcy can temporarily halt eviction proceedings. However, this relief may be short-lived if the landlord has already obtained a judgment of possession against the tenant before the bankruptcy filing. In such cases, the landlord can ask the bankruptcy court to lift the automatic stay regarding the eviction.
• Landlord’s Right to Proceed: If the landlord has a judgment for possession, the automatic stay might not prevent the eviction. Additionally, if the eviction is based on endangering the property or using illegal substances on the property, the landlord can proceed with the eviction by filing a certification with the court.

Chapter 13 Bankruptcy and Eviction

• Opportunity to Cure Arrears: Chapter 13 bankruptcy offers a more robust solution for tenants facing eviction. Under Chapter 13, you can propose a repayment plan to catch up on past-due rent over a period of three to five years. If you can maintain current rent payments and repay the arrears through your repayment plan, you can avoid eviction.
• Automatic Stay Exceptions: As with Chapter 7, if the landlord already has a judgment of possession or if the eviction is due to endangerment or illegal substance use, the automatic stay’s protection may be limited.

Critical Considerations

• Timing is Crucial: To maximize the chance of stopping an eviction through bankruptcy, you should file before the landlord obtains a judgment of possession. Once the judgment is issued, the automatic stay’s ability to protect you from eviction is significantly weakened.
• Certification by the Landlord: Landlords can bypass the automatic stay by filing a certification with the court stating that a judgment for possession was obtained before the bankruptcy filing or that the eviction is due to endangerment or illegal substance use. Tenants have a limited window to contest this certification.
• State Laws and Local Ordinances: Eviction laws vary by state and locality, which can affect the bankruptcy process. Some areas may offer additional protections for tenants that could influence the outcome of an eviction action during bankruptcy.

While filing for bankruptcy can provide temporary relief from eviction, its effectiveness depends on the timing of the filing and the specific reasons for the eviction. Chapter 13 bankruptcy offers a more viable path for tenants to stop an eviction by allowing them to catch up on overdue rent through a structured repayment plan. However, the protections have limits, especially if the landlord has already secured a judgment of possession or the eviction is for cause. Consulting with a bankruptcy attorney who understands the intersection of bankruptcy and landlord-tenant law in your jurisdiction is crucial to exploring your options and making informed decisions about how to proceed.