Evictions, Bankruptcy and the Automatic Stay

Aftermath of an eviction in Baltimore, 2007 (mireille / Flickr)

Can filing a bankruptcy stop an eviction? Yes and no.

Yesterday I consulted with a client on the filing of a bankruptcy case to stop an eviction, so I’m writing it here to explain the process.

Filing for bankruptcy provides what is called an automatic stay that will prevent your landlord from continuing his eviction case against you. However, there are two exceptions to the automatic stay.

Timing is everything when it comes to filing for bankruptcy with an eviction case pending. If the landlord already has a judgement against you to take back the property and now you file for bankruptcy, the automatic stay is useless. The landlord can proceed as if the automatic stay does not exist.

If the landlord is evicting the tenant for endangering the property or the illegal use of controlled substances on the property, then the automatic stay will be of no use.

However, if the landlord does not have a judgment to take back the property, then the filing of the bankruptcy will stop the eviction and one of two things will happen:

The landlord will just wait until your bankruptcy case is over to proceed. That is common in foreclosure cases, but not in evictions because too much time is lost on behalf of the landlord, thus, the landlord will proceed to lift the automatic stay.

The landlord can petition the bankruptcy court to lift the automatic stay and nine out of ten times the court will grant that request.

However, what works in the favor of the tenant is the timing because to lift the stay, the landlord has to obtain a hearing before the bankruptcy judge, get the stay granted, then return back to county/circuit court to advise the judge the eviction can proceed.

In addition to buying more time, the bankruptcy will also wipe out any outstanding debt with the landlord whether attorney’s fees or suing for the balance left on the lease as well as other debts you may have.

Have questions regarding bankruptcy? Then contact attorney Alex Hernandez for a free bankruptcy consultation. Saturday appointments available.

Attorney Alex Hernandez

Representing clients in the areas of Chapter 7 Bankruptcy, Family Law/Divorce, and car and motorcycle accidents for 20 years. (904) 712-5565 or (305)-688-LAWS (5297). *Se Habla Español

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