How Do I Deal With a Possible Eviction if I am Facing Bankruptcy?

Can I Stay In My Property Longer By Filing For Bankruptcy?

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made it much easier for landlords to evict tenants. Usually, if you file for bankruptcy, an automatic stay goes into effect. It prevents creditors from contacting you, filing suit, or otherwise engaging in collection activities. Eviction is different. If your landlord has already obtained a judgment for possession of the rental property in California, filing for bankruptcy will not help.

However, if a judgment has not already been obtained and you have good reasons for filing for bankruptcy, filing may temporarily stay the eviction proceedings. The automatic stay goes into effect and the landlord cannot start eviction proceedings or give you a termination notice. However, the landlord can ask for relief from the automatic stay to continue with the eviction. Courts tend to grant these types of requests.

What if I Have Damaged or Engaged in Illegal Activity on the Property?

If you have used the property for illegal activity or damaged it, your landlord can file a certification with the bankruptcy court attesting to these activities. He must serve you with the certification. If you do not object or deny the allegations within 15 days, your landlord can continue or start eviction proceedings even though the stay is still in place. If you do object, a bankruptcy judge will rule on the issue. As a practical matter, it is difficult to prove that you did not use the property for these purposes, but an experienced attorney can help you build a strong case.

How Will Bankruptcy Impact My Lease?

Even if you aren’t behind on rent, your lease can be affected by bankruptcy. If you have filed for Chapter 7, the trustee must decide within 60 days whether you may keep the lease in light of your financial situation. As a practical matter however, a Chapter 7 trustee will almost never look into a residential lease. The landlord is given the right to request proof that you will be able to make your rental payments on time. If you cannot prove this, the landlord can ask the bankruptcy court to terminate the lease and the eviction may proceed. Here, too, however, as long as you are current with your lease payments, the landlord will usually not take any further action. After all, why would a landlord give a hard time to a tenant that is paying his or her rent? Chapter 13, however, gives you the right to figure out whether you can afford your lease before your plan is confirmed. If you decide that your rent is too high, you have the right to move, just as you did before you filed your Chapter 13 case.

Who Can I Call for Sound Legal Guidance?