Can Bankruptcy Stop an Eviction? Learn How it Works
Facing eviction can be a scary and stressful situation. For many renters filing for bankruptcy is a viable temporary solution as it can help with easing financial burdens and pausing eviction process.
But how well does bankruptcy work when it comes to stopping an eviction? Let’s take a look into the connection between bankruptcy and eviction while discussing the automatic stay, specific conditions by state and the advantages/disadvantages of turning to bankruptcy as a means to stop eviction.
Quick Answer: Yes, bankruptcy can temporarily halt the eviction process, but it’s not a guarantee. It’s recommended that you seek the help of a bankruptcy professional for a personalized assessment.
The Automatic Stay and How It Affects Evictions
When you declare bankruptcy, an automatic stay kicks in right away. This stay puts a hold on creditor actions, including evictions. Can bankruptcy stop eviction actions immediately? Yes, once you’ve filed bankruptcy, your landlord is required to pause any eviction attempts until the bankruptcy case is resolved in court. This temporary measure provides tenants with relief and an opportunity to manage their financial situation.
Evictions Filed Before Bankruptcy
The situation can be a bit more complicated if the landlord issues a notice of eviction before you file bankruptcy. But does bankruptcy stop eviction in such cases? If they received a judgment for possession before the bankruptcy filing, they may be able to move forward with the eviction despite the automatic stay because the possession judgment shows that the court has already ruled in favor of the landlord.
In cases where the eviction is solely based on late rent payments, the tenant might still have an opportunity to remain in their rental property, but they’ll need to take specific actions. According to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, eligible tenants can stop the eviction process, but they’ll need to:
- Submit a certification to the court that shows they have the right to remain in the property so long as they pay overdue rent.
- Deposit the rent arrears with the bankruptcy clerk’s office within 30 days of filing.
Evictions Filed After Bankruptcy
Will filing bankruptcy stop an eviction if it is filed after the bankruptcy process begins? If a tenant declares bankruptcy, the automatic stay rule usually stops all collection efforts, such as eviction cases. Can filing bankruptcy stop an eviction permanently? In some cases, a court may allow a landlord to move forward with the eviction, but they’ll need approval, which is rare. This short term protection gives tenants a period to deal with their financial problems without facing the risk of eviction.
Process for Landlords to Lift the Stay
When a tenant declares bankruptcy, landlords seeking to proceed with an eviction need to submit a request to lift the automatic stay to the bankruptcy court. A hearing will be set for both parties to state their cases. The landlord must show a valid cause for the eviction like overdue rent or violating the lease agreement. If the court deems the landlord’s argument convincing it may lift the stay enabling the eviction process to move forward.
Impact on Tenants
This automatic pause is often a much needed lifeline for financially burdened renters. Not only does it allow them more time to sort their finances, but it also gives them an opportunity to make back rent payments or find somewhere else to live.
Special Considerations in Florida
In Florida, laws work in conjunction with federal bankruptcy laws to offer extra safeguards. For example, can filing bankruptcy stop eviction if tenants submit back rent payments to the bankruptcy court in order to keep the automatic stay protection against eviction for non payment. This requirement ensures that tenants are showing a sincere effort to meet their rental commitments while also taking advantage of the bankruptcy process.
Whether you’re a renter or a landlord, it’s in your best interest to have an in-depth understanding of how these rules will affect your living situation. If you need legal guidance, give us a call today to speak with an experienced bankruptcy attorney.
Exceptions to the Automatic Stay
The automatic stay in bankruptcy halts most collection activities, including evictions, but there are important exceptions.
Federal Exceptions
- Illegal Drug Use and Property Endangerment: Landlords can bypass the automatic stay if the eviction is due to illegal drug use or significant property damage. They must file a certification with the bankruptcy court and serve it to the tenant. Does bankruptcy stop eviction in such cases? The tenant can object, prompting a court hearing to resolve the issue.
- Pre-Petition Judgment for Possession: If a landlord has a judgment for possession before the bankruptcy filing, they can request the court to lift the stay to proceed with the eviction, especially for nonpayment of rent.
Florida-Specific Exceptions
- Nonpayment of Rent: In Florida, if an eviction notice is issued for nonpayment of rent and the tenant files for bankruptcy, the stay can halt the eviction temporarily. The tenant must deposit the overdue rent with the court. Failure to do so allows the landlord to proceed with the eviction.
- Immediate Threats and Lease Violations: Florida law allows landlords to bypass the stay if the tenant poses an immediate threat to the property or violates lease terms,such as unauthorized subletting or engaging in illegal activities.
These exemptions emphasize the importance of knowing the laws of both states and federal law. For individualized advice, call The Attorney Debt Fighters to examine the legal options available to you and ensure your home’s stability.
Curing Rent Defaults Under Bankruptcy
In certain situations, tenants could be given the chance to pay rent that is overdue even after declaring bankruptcy. This may mean settling the amount due within a time frame typically of 30 days. But will bankruptcy stop eviction in such cases? The answer depends on various factors including the tenant ability to cure the rent defaults within the given period.
The tenant must submit an evidence to the court detailing their commitment to paying the rent and will be expected to fulfill this commitment within the specified timeframe. This will allow the tenant to temporarily stop proceedings if they follow the repayment plan.
Pros and Cons of Filing Bankruptcy to Stop an Eviction
Pros:
- Instant Relief: Filing bankruptcy to stop eviction may provide immediate relief by stopping eviction proceedings because of an automatic stay.
- Time to reorganize your finances: The temporary stoppage in evictions allows tenants to sort out their finances, and possibly negotiate payments plans or other arrangements with landlords.
- Protection from Collections: Bankruptcy protects tenants from other collection actions, and gives the chance to improve their financial position.
Cons:
- Temporary Solution: This stay can be only temporary and landlords may make motions to end the stay, particularly in the event of a convincing argument to evict.
- Credit Impact: The filing of bankruptcy may result in a negative long-term impact upon credit score, which can affect the potential of the tenant to get housing or credit later on.
- A Guarantee is Not Given: Bankruptcy does not guarantee that the tenant will be able to remain in the rental home particularly when the landlord has secured the judgment of possession, or in the event that the tenant fails to satisfy the conditions to cure rent defaults.
Legal Advice and Assistance
Understanding the various aspects of bankruptcy law and eviction laws, isn’t always easy. It’s essential to seek legal assistance to clarify your rights and options. Legal experts provide personalized guidance. They will assist you in taking the appropriate steps to protect yourself.
Let Us Help You Stop Evictions – Contact Attorney Debt Fighters Today
In many cases, bankruptcy can provide temporary eviction relief, but it’s not always guaranteed. Having an awareness of how the automatic stay functions, its exceptions and Florida bankruptcy laws is essential to winning the fight to stay in your home.
If you’re dealing with a possible eviction and thinking about bankruptcy, The Attorney Debt Fighters are here to help you file or consider alternative debt relief options. Contact us today for your free initial consultation with a proven bankruptcy lawyer in Florida.
