Can I Be Evicted Because of Bankruptcy?
The Census Bureau reports that in Pennsylvania, about 70% of residents are homeowners, while another 20% are renters. Among these many renters, some will file for Chapter 13 or Chapter 7. But could filing for bankruptcy cause you to be evicted? What sort of rights do you have as a tenant?
How the Automatic Stay Can Affect Eviction
The short answer to the question of whether or not you can be evicted because of bankruptcy is that it depends. More specifically, it depends largely on whether you filed before or after your landlord obtained an eviction judgment. (A judgment is a document which details the court’s final decision on a legal matter.)
This is due to something called the automatic stay, which places a freeze on any collection actions by creditors from the moment a debtor files for consumer bankruptcy. The stay extends to landlords, meaning that if you are behind on rent but have already filed, your landlord will not be able to initiate the eviction process.
However, it is also important to be aware that creditors — including landlords — may request that the stay be lifted. If the court grants your landlord a lift on the automatic stay, then he or she will be able to proceed with the eviction actions as originally planned. If a landlord wants the stay to be lifted, he or she must attend a hearing, which frequently results in a lift being granted within several days. You will have to make a convincing argument in court as to why the stay should not be granted.
If the Eviction Process Started Before Filing Bankruptcy
Landlords now have more power to affect evictions than they did in the recent past. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) added another layer of complexity to bankruptcy proceedings. (In fact, in 2007 Judge Martin S. Teel, Jr. was quoted as saying BAPCPA’s “many technical requirements” created a “minefield for pro se filers” in the Third Branch.)
If the landlord had a judgment prior to the filing, he or she will not be bound by the automatic stay. Additionally, if the tenant seriously violated the terms of their lease (e.g. destruction of property), then the landlord can move forward with eviction regardless of whether or not the stay has been lifted by filing a certification. In this scenario, the landlord must serve the tenant notice of the certification within 15 days.
However, the tenant still has an opportunity to fight back at this stage. Upon receiving this notification, you can counter-serve your landlord with an objection, at which point the courts are obligated to hold a hearing regarding your objection. If during this hearing you are able to demonstrate the issues noted in your landlord’s certification are not actually true (e.g. the landlord claimed property damage when no such damage ever occurred), then the court may side against your landlord and block the eviction from proceeding.
Bankruptcy Trustees and Eviction
Finally, it is worth touching on the role of the bankruptcy trustee in these matters. Assuming eviction has been ruled out as a concern, your trustee may permit you to keep living in your current accommodations. This is because forcing debtors to pay for new housing is often detrimental to the creditors trying to collect the payments they are owed. However, if your living situation is very costly, the trustee may determine that a lower rent situation would be more financially appropriate, at which point your lease could be terminated.
Call a Pennsylvania Bankruptcy Attorney at Young, Marr & Associates Today
If you or someone you love is filing for Chapter 7 or Chapter 13, or if you feel you are a victim of creditor harassment, our bankruptcy lawyers can help. To schedule a completely free and private legal consultation, call the law offices of Young, Marr & Associates at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania, or contact us online today.
☑ Been paying credit card balances that seem to never go down?
☑ Lost your job and are now having trouble keeping up?
☑ Attempted to work out a payment arrangement to no avail?
☑ Been notified of a mortgage foreclosure action?
☑ Been denied for a mortgage or other line of credit?
If the answer to any of these questions is “yes” then bankruptcy may be an option that you should consider.