There are several bankruptcy options for tenants who are facing eviction. These options sometimes depend upon which type of bankruptcy you file. The most common type of bankruptcy is Chapter 7 which discharges most unsecured creditors, and generally last 4 1/2 months. The other type of Bankruptcy is Chapter 13, which is a payment plan bankruptcy which typical last 5 years.
Landlord has not obtained an eviction judgment yet:
If a landlord has not obtained an eviction judgment prior to your bankruptcy, then the automatic stay prevents the landlord from moving forward with an eviction lawsuit. The stay can last until your Chapter 7 Bankruptcy case is closed in 4 to 6 months from filing.
Landlord has been awarded an eviction judgment:
If the landlord has already obtained a judgment for possession in an eviction lawsuit, then the only way to prevent an eviction is to deposit the total arrears with the bankruptcy clerk. In other words, depositing your back owed rent in an account with the bankruptcy clerk will activate the automatic stay preventing the eviction.
This option is seldom used because for most people depositing the total sum of the arrears is not a possibility. If this is the case, bankruptcy will not prevent the eviction, but it will
discharge your back-owed rent. Having your back-owed rent discharged is critically important, because in Pennsylvania landlords can garnish your wages for past rent owed.
Landlord has filed a motion for relief of the automatic stay:
Your landlord may file for permission to proceed with the eviction lawsuit (even though you filed bankruptcy) if you did not pay your post-filing rent, or for other reasons such as property damage, or violating the lease in some other way.
The majority of landlords will most likely wait to proceed with an eviction lawsuit until after your bankruptcy is closed, rather than hire an attorney to file a motion for relief in the bankruptcy court. However, there is a risk that your stay from the eviction may not last the full 4 to 6 months from the time you filed a Chapter 7 bankruptcy.
Chapter 13 Bankruptcy and Eviction:
If you have a highly favorable residential lease in which you would prefer to keep your apartment, then Chapter 13 might be the right option. In the chapter 13 bankruptcy, to prevent eviction you will be allowed to pay your delinquent rent over a five-year period, while continuing to pay your current rent.
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