Bankruptcy, Evictions and The “Automatic Stay”Bankruptcy, Evictions and The “Automatic Stay”
April 19th, 2010
As soon as you file for a Chapter 7 bankruptcy or Chapter 13 bankruptcy, you are protected against certain types of collection activities by what is known as an “automatic stay.” The automatic stay is meant to give you time to get your finances in order and goes into effect immediately upon the filing of your bankruptcy petition. While the automatic stay prohibits collection activities by creditors in many instances, it does not provide protection against all creditor actions, including some eviction attempts.
Under recent bankruptcy law, if prior to the filing of your bankruptcy petition a court had already ruled in favor of the eviction or other action allowing the landlord or lessor to re-possess the property, an automatic stay cannot keep you from being evicted. Likewise, the automatic stay will not apply if the landlord or lessor is claiming the eviction is due to the use of illegal controlled substances or endangerment to the property.
If however, there has been no court judgment at the time your bankruptcy petition is filed and your eviction is based solely on failure to pay rent, the automatic stay may provide you with some relief.