Can You Be Evicted During Bankruptcy?
Examining the effect of a bankruptcy filing on a landlord’s right to remove a tenant
One powerful and immediate protection that bankruptcy grants is the issuance of an automatic stay, a court order that prohibits a creditor from taking action against a debtor to collect amounts owed. The automatic stay stops foreclosure proceedings on a debtor’s home. But when a tenant who has filed for bankruptcy is threatened with eviction, the automatic stay may be ineffective. Understanding your rights in that situation is critical. At Mark E. Cohen, Esq., I have more than 28 years of experience as a Queens Chapter 7 bankruptcy lawyer. I have fought for tenants’ rights during bankruptcy and have achieved fair resolutions in eviction cases.
New York law covering evictions during bankruptcy
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 changed the law regarding the effect of the automatic stay on eviction proceedings. The stay does not apply if the landlord obtained a judgment of possession prior to the tenant’s bankruptcy filing. Under the prior law, there was a potential for hardship, since a landlord was powerless to remove a defendant for nonpayment of rent for the duration of the bankruptcy proceeding.
There are a few factors that may influence a tenant’s ability to prevent eviction during bankruptcy:
- Landlord’s request to lift the stay — If the tenant has already filed for bankruptcy when eviction proceedings are begun, the automatic stay applies but the landlord can seek to have it lifted. This request is often granted, since the tenancy generally has no bearing on the value of the tenant’s bankruptcy estate.
- Tenant’s curing of default — New York law allows the tenant to cure a rent default by declaring that option in the bankruptcy petition and depositing with the Bankruptcy Court the amount of rent that will be due within 30 days of filing the petition. The tenant must also pay all outstanding rent within the next 30 days.
- Illegal substances or property endangerment — The court will not prevent an eviction if the tenant has possessed illegal substances on the property or has acted in any way to endanger the landlord’s property. However, the law requires the landlord to file a certification asserting illegal substance use and/or property damage and to serve notice of the same on the tenant. If the tenant files an objection, the court will hold a hearing at which the tenant may prove that the charges are false or that the situation has been remedied.
Even if your automatic stay does not block eviction, it does freeze your obligations for a wide range of debt. This may free up funds for you to satisfy your rent and remain in your residence. Knowing how bankruptcy works can empower you to obtain a positive result. So, if you’re under financial pressure, you should speak to a Chapter 7 attorney sooner, rather than later.
Contact an experienced bankruptcy lawyer representing tenants in Queens, NY
Mark E. Cohen, Esq. provides bankruptcy advice and representation for tenants in Queens and throughout New York City and its surrounding counties. To schedule a consultation, call 718-487-9979 or contact me online. My office is conveniently located on Old Country Road in Westbury.