Bankruptcy can and does stop or at least temporarily halt evictions for thousands of tenants. Can filing bankruptcy stop eviction for you?
Due to the complexities of bankruptcy code, it is recommended that you consult with a qualified bankruptcy attorney if you want to know if bankruptcy is appropriate for your situation. After all, bankruptcy is a far more serious legal proceeding than an eviction. You need to make sure that you are making the best decision based on your situation, which may be very different than the situations of others who are filing bankruptcy to stop evictions by their landlords.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 removed some rights of tenants who sought to use bankruptcy as a tool for fighting eviction. As a result of the law, it is actually easier than before for your landlord to evict you, even if you seek bankruptcy protection.
An automatic stay against eviction could apply if you file for bankruptcy before your landlord pursues the eviction. The filing basically prevents the landlord from having the right to force you to leave the rental property.
It can give you some time to either get your financial affairs in order or to at least prepare for moving out of the home or apartment. While an automatic stay sounds great, it does not last forever. Your landlord may request a hearing in bankruptcy court regarding this automatic stay. Your landlord can contact your bankruptcy judge and request that the automatic stay be lifted. If the request is approved, then you might lose this protection. When a judge decides to lift the automatic stay, then your landlord may be able to pursue your eviction within days.
It is precisely this limitation on automatic stays that can dilute the value of trying to stop the eviction by filing bankruptcy. You will need to find out (with the help of an attorney) whether your overall financial situation warrants a bankruptcy filing. If bankruptcy is in your best interests, then the filing date can be very important in terms of what rights you have against a forceful eviction by your landlord.
Filing for bankruptcy no longer prevents an eviction if your landlord has already won a judgment. A last minute bankruptcy filing does not offer the same protection that it used to before 2005. A landlord who has an eviction order approved may still pursue the eviction, even if you rush to file bankruptcy.
It should be noted that there are some exceptions to this, and these exceptions could vary based on individual state laws. For this reason, it is wise to consult with a qualified bankruptcy attorney rather than trying to make a hasty decision on your own.
While a bankruptcy filing can and does often delay an eviction, it is not a permanent safeguard. You could buy yourself some time, but you cannot prevent an eviction forever if you fail to make your rent payments. It is possible that your bankruptcy judge may allow you to remain in the home if you start paying rent again, although you could be asked to move to a cheaper rental property if deemed appropriate.
If you have serious debt problems that are causing you to face substantial legal action by your creditors, then a bankruptcy filing may be an appropriate solution. There are some protections against eviction if you file prior to your landlord filing for eviction. However, you should make the decision based on your situation, not just as a means for halting the eviction.
Can bankruptcy stop eviction for you? Consult with a bankruptcy lawyer to determine your needs and rights. If you cannot afford one, consider utilizing the free services through LSC.