Can you file bankruptcy to stop eviction? The answer is, “Maybe.” But, should you file bankruptcy for the sole purpose to stop eviction? The answer is “Probably not.”
The first step to stop eviction is to know exactly where you are in the eviction process. The entry of a court judgment for “unlawful detainer” is the dividing line to decide when bankruptcy will stop eviction.
Stop eviction before there is a judgment of unlawful detainer
You can stop eviction by filing for bankruptcy if your landlord does not have an actual judgment of unlawful detainer. In this situation, bankruptcy will work the same way that it normally does to impose an automatic stay on all creditors.
But don’t expect your landlord to sit on her hands. Your landlord can get into bankruptcy and seek an order lifting the automatic stay. This normally happens within one or two weeks. The bankruptcy judge can normally be expected to grant your landlord’s motion for relief from the automatic stay. If that happens, the case will then go back to the eviction court for determination. The landlord will pick up at the point where it was left off.
In such a situation, you will stop the eviction for just one or two weeks. Ask yourself if that is really worth putting a bankruptcy on your credit record. It will remain on your record for 10 years, even if you don’t go all the way through it.
Stop eviction after there has been a judgment of unlawful detainer
If there is already a court judgment, bankruptcy will not help you unless you have correctly complied with a special set of complex regulations. The exact legal requirements are POSTED HERE, and found in Bankruptcy Code Section 11 U.S.C. §362. You have to follow those rules exactly. If you make any mistake the bankruptcy probably will not stop eviction.
When filing your bankruptcy petition, you must complete the section on Page 2 of the Voluntary Petition entitled “Certification by a Debtor Who Resides as a Tenant of Residential Property.” You must make the required certifications in that section. You then must make the required rent deposit with the bankruptcy court and pay into court any rent that would become due within 30 days after the bankruptcy filing date. Thereafter, you must also cure the entire rent default within 30 days. Otherwise, there has been no bankruptcy stay, and you did not stop eviction.
Is bankruptcy really the right way to go to stop eviction?
There are times when a tenant feels that the judgment of unlawful detainer should be reversed. You might want to get your “case in front of a judge.” But, it won’t work that way in bankruptcy court. If you don’t have the back rent and did not follow the bankruptcy procedures about paying the rent, you are going to be evicted.
Eviction: Move voluntarily, or get thrown out?
Bankruptcy makes the most sense if you need a bankruptcy case anyway, because of other debts. If so, you might be better off to file your bankruptcy after you have already moved. It may be very hard to find a new place to rent if you have to move in the middle of your bankruptcy case. Also, moving before you file will allow you to discharge the entire amount of back rent in your bankruptcy.
If you are still in the premises after the date you file, your landlord is still legally entitled to collect damages from you based on the value of all rent that comes due from the date you file until the date they get you out.
Don’t wait to be forcibly evicted
If you are going to have to move, it is better to move before the landlord files for unlawful detainer. You are going to have a horrible time finding a place to rent after that unlawful detainer hits your credit. Landlords don’t seem too concerned if you have filed bankruptcy. But if you have stiffed another landlord, they don’t want you.
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