Financial hardships can hit at inopportune times. Bills pile up, rent is past due and your downward spiral continues. Whether your financial problems started due to a medical emergency not and/or partially covered by insurance, job loss, divorce or out-of-control credit card debt, no one wants to face eviction. You may be wondering if bankruptcy proceedings will impact an eviction. Read on to learn more about how a bankruptcy can help you if you are facing an eviction.
The first thing that happens when you file for bankruptcy is that an automatic stay immediately goes into effect. The automatic stay prohibits your creditors from contacting you or continuing their collection efforts; it marks the official end of creditor harassment in any of its forms. Congress, however, in its infinite wisdom, created exceptions to this automatic stay for certain creditors. Some of these exceptions relate to landlords and evictions.
One thing that may impact whether a landlord can continue eviction proceedings is if the landlord has obtained a “judgment for possession.” What is this? A judgment for possession is an order of the court (not the Bankruptcy Court) that determines who is entitled to possession your residence. If you file a bankruptcy after your landlord has already obtained a judgment against you for possession of the property, then bankruptcy does not provide much protection. If you have already filed a bankruptcy before your landlord has obtained a judgment for possession of the property, then the automatic stay stops the landlord from starting the eviction proceedings or even giving you a notice to quit.
State Law Exceptions – Some states allow renters to “cure” or payback their rental arrears even after their landlord has obtained a judgment for possession, then bankruptcy can provide you with more time in the property and an opportunity to bring your rent current.
Special Circumstances – If the landlord is alleging illegal drug use or endangering behavior of some sort on the property then the eviction may proceed without requesting relief from the automatic stay from the court. A landlord must file a certification with the court stating that an eviction action was already filed on these grounds or that you have used illegal drugs on the premises or endangered the property within the last 30 days. A renter then has 15 days to object to the landlord’s certification. The court will then decide a ruling on the issue.
To find out more about your state laws and any special circumstances your bankruptcy may have on your eviction, consult a qualified bankruptcy attorney near you.