Can You Get Evicted for Declaring Bankruptcy?

Declaring bankruptcy can be a nightmare for tenants. Add to that the prospect of getting evicted because of it, and life can get stressful very quickly. Can you get evicted for declaring bankruptcy? Here’s what you need to know:

Automatic Stay

If declaring bankruptcy is on the table, chances are you might be behind in rent as well. If the landlord seeks to evict you because you’re behind in rent payments, and you’ve filed a “Chapter 7” or “Chapter 13” bankruptcy, then the landlord has to go to federal court to ask that the automatic stay (granted to the tenant by law) gets lifted. An automatic stay stops you from getting evicted immediately. The landlord will not be able to evict you or even serve you with a notice. The automatic stay can get lifted by the bankruptcy judge, making it possible for the landlord to proceed with evicting you.

With all that said, all bets are off if you use drugs on the premises or cause damage to the apartment. All the landlord needs to do is to file a certification with the bankruptcy judge stating that you or your guests used drugs, or itemize damages to the apartment unit, and the automatic stay will be lifted immediately.

Eviction Proceedings Prior to Filing

Some tenants misuse bankruptcy filings to stop evictions. However, if your landlord already received a judgment to possess the apartment or rental unit prior to you declaring bankruptcy, it won’t stop the eviction process in most states. The landlord will be able to evict you successfully and regain possession. Automatic stay will not apply in this situation, which means you won’t be able to delay getting evicted. There are some states that will stop or delay a landlord’s ability to evict a tenant declaring bankruptcy even after winning a judgment for possession. If you live in one of those states, you would need to file a certification and pay rent, the amount that’s past due and future rent.

Bankruptcy Trustee Decision

One consequence of declaring bankruptcy is that the person in charge of your case, a bankruptcy trustee, has the power to decide whether to terminate your lease agreement regardless of whether you’re violated the lease or are behind in rent. A major factor that the bankruptcy trustee will consider is the amount of  your rent payment. For example, if you’re paying 25%, 50% or more for renting a two bedroom apartment than what most people in the area are paying, the bankruptcy trustee might terminate the lease in order to benefit the creditors. The idea being that you can pay the difference in rent payments to the creditors you owe.

It’s important to know your rights before declaring bankruptcy, so that you can prepare for the worst. If you live in an area where apartment rentals are scare, an eviction can be devastating. Find out the laws in your state, and get the help of a lawyer when possible.