How To Use Bankruptcy To Stop An Eviction

Behind on the rent? Looking to buy yourself some more time, maybe even wipe out the obligation to the landlord altogether?
If so, you may be tempted by the prospect of filing for bankruptcy.
Filing for bankruptcy will usually wipe out the balance due for past due rent as of the date on which the case is filed. Rent for any period after the case is filed won’t be wiped out, though.
But if you time your bankruptcy correctly, you may also be able to buy some more time in the place before you have to move out.
The Automatic Stay
The filing of a bankruptcy petition stops all efforts at collection, including an eviction proceeding. This automatic stay remains in effect until a creditor makes a request to the court and that request is granted, or until the case is closed or dismissed, or when your discharge is granted.
This means that, under normal circumstances, the eviction action has to stop the minute your bankruptcy case is filed with the court.
Stopping the eviction means you get some extra time before you need to move out.
Landlord’s Exception To The Automatic Stay – Judgment Of Possession
If there a judgment for possession of the property due to failure to pay rent was issued before the bankruptcy case is filed, there is an exception to the automatic stay.
This exception to the automatic stay would not apply if you do all of the following:

1. specially mark the petition indicating a judgment of possession has been obtained on the rental property;
2. provide the name and address of the landlord that obtained the judgment;
3. file with the petition and serve on the landlord a certification under penalty of perjury that, under the applicable landlord-tenant law, there are circumstances under which you would be permitted to cure the entire monetary default that gave rise to the judgment for possession;
4. along with the petition, deposit with the Clerk of the Bankruptcy Court any rent that would become due during the 30-day
5. period after the filing of the bankruptcy petition; and
6. within 30 days of the filing of the petition, file with the bankruptcy court and serve on the landlord a further certification (under penalty of perjury) that the entire monetary default has been cured.

Landlord’s Exception To The Automatic Stay – Non-Monetary Eviction
If you’re being evicted because of a reason aside from failure to pay the rent – for example, conduct causing a health and/or fire risk; use of illegal drugs on property – then there is an automatic exception from the automatic stay.
This exception applies only to residential property in which you reside, if you are “endangering” the property or using, or allowing to be used, illegal controlled substances on the property.
In order for this exception to apply, the landlord must file with the court, and serve on you, a certification under penalty of perjury that such an eviction action has been filed, or that you, during the 30-day period preceding the date of the filing of the certification, have endangered property or illegally used or allowed to be used a controlled substance on the property.
If such a certification is filed then you are required to file an objection with the court and serve such objection on the landlord within 15 days of the landlord’s certification. The court will hold a hearing, and you have the burden of proving that the landlord is incorrect.
Time Your Bankruptcy To Maximize The Benefit
Depending on your goals, the timing of your bankruptcy filing can be really important.
If you’re looking to wipe out as much of the deficiency as possible, file your case as late as you can.
But if you want to buy a little time before you have to pack up and move, you may want to file before the possession order comes down from the housing court judge.