An automatic “stay” (or stop) goes into effect for most collection activities when you file Chapter 7 or Chapter 13 bankruptcy. If you are a renter, you may be concerned about your ability to pay rent and asking whether the stay affects eviction proceedings. The effect of the stay on eviction proceedings depends at what point of the eviction process you find yourself and why. An experienced Los Angeles bankruptcy attorney can help you figure out whether bankruptcy is a smart solution for you.Eviction Process
In California, before you can be evicted for nonpayment of rent, you must be served with a 3-day notice to pay rent or quit. After that period expires, the landlord must file an unlawful detainer action in court and you have five days to respond before a default judgment is taken.
If you file for bankruptcy only after your landlord has obtained a judgment against you for possession of real property, bankruptcy probably will not protect you to the same degree and effectiveness. However, if you file for bankruptcy at some point before that, the automatic stay will probably protect you a lot more.
Chapter 7 bankruptcy permits the trustee who is presiding over your bankruptcy—via the court—to have more control over your lease than Chapter 13 does. If a trustee believes the rent on your home is unreasonable, he can ask the court to terminate the lease and allow the landlord to evict you. The trustee has to make a decision within 60 days of the petition’s filing date whether to tell the court to terminate the lease. If the trustee lets you continue on the lease, the landlord may ask you to prove you can make future rent payments in full. If you cannot prove your ability to make future rent payments, the landlord can ask the bankruptcy court to terminate the lease and lift the stay on eviction.
In contrast, Chapter 13 bankruptcy allows you more freedom to renew the lease even if the landlord would prefer to evict you. You must make a decision on whether to terminate the lease before the court approves or confirms your repayment plan. If you keep your lease, the landlord may ask the trustee and court to treat the back rent as an administrative claim, thereby receiving higher priority than other unsecured claims. The landlord can also ask the bankruptcy court to garnish your wages under the repayment plan.
Even if the automatic stay applies to the eviction proceedings for your home, a landlord may ask the court for relief from the automatic stay. The bankruptcy judge will then ask you to show a good reason why the eviction shouldn’t proceed.Exception to Automatic Stay
There are certain circumstances in which the automatic stay does not matter with regard to your eviction case. If your landlord alleges you have used illegal drugs on the premises or otherwise endangered the premises, he or she may proceed with the eviction without asking the court to lift the stay of the eviction. Instead, he or she can file a certification with the court stating that you have used illegal drugs or otherwise endangered the property in the prior 30 days. You may object to the certification within 15 days, but if you don’t, the landlord can continue with the eviction. After your objection, the court will hold a hearing within 10 days to decide whether your objection is meritorious.
While eviction alone is not a reason to file bankruptcy, you may want to consult with a knowledgeable attorney if you are unable to pay rent, and are overwhelmed by debt as well. Contact experienced Los Angeles bankruptcy lawyer Devin Sawdayi at 310-475-9399 or via our online form for help with your specific situation.