If you receive an eviction notice, filing for bankruptcy can bring the eviction action to a stop immediately. However, how long you’ll be able to stay will depend on:
- where the eviction case is in the process
- the type of bankruptcy chapter you file
- the laws of your state
- if illegal or destructive activity took place on the property
- whether you can bring your rent current, and
- your landlord’s willingness to work with you if you can’t pay the back rent.
In this article, you’ll learn more about how bankruptcy can help stay or stop an eviction case today. However, because filing for bankruptcy can also affect your ability to lease in the future, you'll want to learn about the challenges you could face when renting an apartment after bankruptcy.
Bankruptcy Can Stop an Eviction
Bankruptcy can buy you some time in your home when facing eviction. Fortunately, when you’re faced with an emergency like being kicked out of your home, you can also file bankruptcy fast using what's known as an "emergency bankruptcy" or "skeleton" bankruptcy.
The procedure saves time because you don’t have to complete all the forms. Instead, you submit a shortened filing and have 14 days to finish and file the remaining forms. Also, all forms can be filed online. For specifics, read about timing issues in bankruptcy.
How Bankruptcy's Automatic Stay Stops an Eviction
When you file for bankruptcy, an order called the automatic stay is put in place. The bankruptcy stay stops almost any collection action, including most pending evictions. It's essential to recognize that "pending" is the keyword. As long as your landlord doesn’t have a judgment for possession before you file the bankruptcy, the bankruptcy filing will stop the eviction process.
When Bankruptcy Won't Stop an Eviction
Not all evictions are stopped by bankruptcy. To determine whether filing for bankruptcy will be helpful, ask yourself: Did a court rule that the landlord could evict you? The automatic stay won't stop the process if the answer is yes.
Filing for bankruptcy won’t stop the eviction if the case has already been heard and the judge ruled in favor of the landlord. The order is commonly called an “eviction judgment” or a “judgment for possession.” Although the landlord won’t be able to collect rent from you, the eviction can proceed as if you never filed for bankruptcy. You’ll have to leave the property.
When the Automatic Stay Won't Last Long
Even if the landlord doesn't have an order of eviction, the landlord can take steps to get around the automatic stay.
The landlord moves to lift the automatic stay. The landlord can file a motion requesting that the court lift the stay to allow the landlord to proceed with the eviction. The landlord will show that you’re behind on payments and ask that the bankruptcy court let the eviction case move forward. Courts are usually sympathetic and grant these types of motions.
Illegal drug use or property endangerment. If the landlord alleged illegal drug use or property endangerment in the eviction action, the automatic stay wouldn’t stop the eviction case. But you’ll still have some time. Your landlord will file a certification stating that the eviction is due to illegal drug use or property endangerment within the last 30 days. The landlord can continue the eviction if you don’t file an objection within 15 days.
Exception: Filers in Some States Can Catch Up on Rent
A few states have rules that allow a tenant to stay and catch up on a rent arrearage even after the landlord gets an eviction judgment. If your state allows this, you’ll have to do the following when you file for bankruptcy:
- file a certification
- deposit the rent that will become due in the next 30 days with the bankruptcy court clerk within 30 days from filing the certificate
- serve the landlord with the certification, and
- file a second certification stating that you paid the past due rent (and serve it on the landlord).
The landlord can object to certification or ask the judge to decide on any dispute. Because this is a somewhat complicated procedure, you’ll likely need the help of competent bankruptcy counsel to help you through the process.
Stopping an Eviction: Chapter 7 Bankruptcy
Filing a Chapter 7 bankruptcy is rarely a permanent eviction solution. While a Chapter 7 bankruptcy filing can stop an eviction, all it will do is buy you some extra time—and it won’t be much. The landlord will likely file a motion to lift the automatic stay, and if you’re behind on rent, you’ll find yourself back where you started.
For those reasons, many people find it best to contact the landlord and try to make payment arrangements or mutually agreeable moving arrangements. However, if your landlord won't work with you, or if you have other debts you can "discharge" or erase in bankruptcy, getting rid of debt and a short eviction stay might be worth the cost of filing for Chapter 7 bankruptcy.
Clearing an Eviction: Chapter 13 Bankruptcy
The automatic stay in a Chapter 13 bankruptcy filing will stop an eviction before the landlord receives an eviction judgment (and even afterward in a few states).
Unlike Chapter 7, you’ll have a better chance of clearing the eviction in Chapter 13 if you want to stay in the property—but it’s not guaranteed. You’ll have to pay your monthly rent and bring your arrears current. Otherwise, you’ll have to get your landlord to agree to let you catch up through your three to five-year repayment plan.
The Chapter 13 Process
The automatic stay will stop your landlord from evicting you in most cases. But even so, staying isn’t guaranteed. An eviction case still might go forward.
The landlord files a motion to lift the automatic stay. The landlord can still ask the court to lift the stay and allow the eviction to proceed. Courts are often willing to let a landlord do so because the law does not require landlords to provide free housing.
The landlord alleged illegal drug use or property endangerment. If the landlord has alleged illegal drug use or endangerment of the property in the eviction, a bankruptcy filing will not stop the eviction from going forward (see above).
You’ve filed more than one bankruptcy case recently. If you’ve filed multiple bankruptcies, the automatic stay could be limited to 30 days or might not attach.
If one of the above doesn’t occur, you’ll still need to work with the landlord.
Negotiating an Agreement With Your Landlord to Clear an Eviction
You don’t have a right to stay in your residence just because you filed for Chapter 13. You and your attorney must work with your landlord to determine how the rent will get caught up.
Your landlord will likely want the back payments paid soon. If you can’t make that happen, you might be able to include a provision in the Chapter 13 plan allowing you to catch up on the rent payments through the plan and continue to make your ongoing rent payments. Some landlords will agree because you’ll be incentivized to make monthly payments.
However, the landlord doesn’t have to accept payment terms. The law entitles the landlord to reasonably prompt payments, so the landlord isn’t bound to any agreement that prevents back payments from getting paid quickly.
Another consideration is that filing Chapter 13 costs more than Chapter 7 (and requires you to have an income). It probably wouldn’t be worth filing Chapter 13 if eviction is your only debt problem.