31 May What Happens If I Am A Renter Filing Bankruptcy And My Landlord Is Trying To Evict Me?
While back rent is dischargeable in a bankruptcy proceeding, your landlord has options when you file for bankruptcy. Timing is everything in this situation. If your bankruptcy is filed BEFORE the state court enters an eviction order, then the automatic stay kicks in and you are protected, as my colleague, Stephen Otto, of Penn., explained in a blog last year…UNTIL your landlord goes to see an attorney and/or files a motion to lift the stay so he can evict you. (Filing a Motion to Lift The Stay is expensive and it might not be worth it to the landlord, especially if you stay current on your post-filing rent). If you stay current AFTER your bankruptcy is filed, the landlord cannot evict you unless that motion for relief from stay is filed. If you do not stay current on the rent after your bankruptcy is filed, your landlord does not have to ask permission from the bankruptcy court to start an eviction proceeding.
However, your landlord might choose to do a “no-cause” eviction, if that is allowed in your state. For example, in Oregon, landlords can give a 30-day notice to move out (when there is no lease in effect), and the landlord does not have to give a reason. Some landlords might do that.
If your landlord already has a state court order evicting you from the property, you still have options. Under the 2005 Bankruptcy Act, there is a provision to allows you to certify (swear) that your state court laws allow a renter to catch up the rent.
Also, at the time you file your bankruptcy, you must pay to the Bankruptcy Court Clerk the amount of rent that will be payable to your landlord for the next 30 days. (I am sure that the bankruptcy court clerks are thrilled to find out that they are now “bankers” for the landlord.). Once that certification is filed, and the rent is paid to court, a debtor/renter has 30 days protection from eviction, unless the landlord objects to the whole process. If the landlord objects, the judge will hold a hearing very quickly to determine whether you should be evicted or not. There is a final requirement that you file a second certification saying that you have caught up the past due rent during this period of time. That second certification must be filed BEFORE the end of that initial 30-day period or the automatic stay expires (for your landlord only). Again, if the landlord objects to that second certification, the Court will hold a hearing to determine whether the landlord can follow through with an eviction.
This process sounds complicated and it truly is…..a debtor should not try this alone. The deadlines are strict and the consequences for missing a deadline are dramatic. There are other reasons that that the landlord can ask the court for permission to evict you, similar to state court reasons; if you really want to stay in the rental unit, you should seek the advice of an attorney who has experience in both bankruptcy law and landlord-tenant law.
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