Bankruptcy for Tenants: What Happens if I File for Bankruptcy Before the Landlord Files an Eviction?
When faced with eviction, tenants who are thinking of filing for bankruptcy should speak with an attorney.
Bankruptcy's Automatic Stay and Its Impact on Eviction:
If a tenant files for bankruptcy before their landlord files an eviction, the bankruptcy judge in federal court starts an automatic stay for state court cases. This "automatic stay" is like a shield: it stops the landlord from serving an eviction notice or continuing the eviction process.
| Chapter 7 Bankruptcy | Chapter 7 cases usually last about four months, so that would be the longest a tenant could reasonably expect the bankruptcy filing to delay the eviction. However, many landlords won't wait for the Chapter 7 case to end. |
| Chapter 13 Bankruptcy | The bankruptcy court will put the automatic stay if you file for Chapter 13 before the landlord files for eviction. The stay will likely be temporary, because filing for Chapter 13 doesn't guarantee a way for tenants to stay in the home. In Chapter 13, the landlord has the right to receive the back rent within a "reasonable" time, which most courts interpret to be about 30 days. A tenant may likely have to leave if the tenant can't negotiate with the landlord during that time period. |
Landlord's Right to Petition for Lift of Automatic Stay:
The automatic stay can help give the tenant some time. Landlords can ask the bankruptcy judge to lift the automatic stay to continue the eviction process. The landlord has to go through extra steps, but this gives landlords a safety net to protect their rights as well. So, bankruptcy does not guarantee that eviction will be completely out of the picture.
Remember, bankruptcy laws are complicated. They may vary based on location, so seeking legal help is important to make informed decisions and protect one's rights effectively. For resources, click here.
The above article provides information about legal issues but is not the same as legal advice. Legal advice is when a lawyer applies the law to your specific situation. The information in this article does not replace the advice or representation of a licensed attorney. Law Center for Better Housing cannot guarantee the accuracy or completeness of the information in this article and is not responsible for any consequences that may result from using it. You should consult with a licensed attorney to ensure the information in this article is appropriate for your specific situation. Using the information in this article does not create a relationship between Law Center for Better Housing and you as your attorney.