How Evictions Are Handled In Bankruptcy
This article has been updated: See the updated article on stopping evictions with bankruptcy.
A frequently asked question I get is whether someone can file a bankruptcy case to stop a landlord from evicting them from their home.
The answer, as with many legal questions is: It depends.
The automatic stay, which is the injunction preventing collections that goes into place when a bankruptcy case is filed, will stop most evictions in progress when a bankruptcy case is filed.
But if the tenant/debtor does not catch up on the past due rent amounts, or provide a plan for doing so “promptly”, the landlord can simply request permission from the bankruptcy court to proceed with the eviction. So, how much additional time you will get by filing bankruptcy will depend on how aggressive the landlord is, and where he/she is in the eviction process when you file your case.
It could range from a week or so to a couple of months, but as stated below, in some cases it may not extend the time at all.
California Eviction Process
In California, eviction is a 3-part process. It starts with a “3-day notice” to pay the past due rent, or quit possession. Once that 3 days expires without payment, the landlord can file an Unlawful Detainer action in the courts, in which they can seek both monetary damages, and an order for possession of the property. The third step is actual eviction which is carried out by the sheriff or Marshall’s office.
Some bankruptcy courts also take the position that once the 3-Day notice has expired, there is no longer any lease rights that the tenant/debtor has and, therefore, the automatic stay does not apply in a bankruptcy case filed after expiration of the 3-Day notice. In such instances, no bankruptcy court permission would be necessary to proceed with the eviction process.
In short, the best case scenario one has in filing a bankruptcy to stop an eviction would be a short term delay. If this is the only reason for filing bankruptcy, it is not really an appropriate use of the bankruptcy laws nor is it likely a prudent reason to file. Many landlords will give additional time to move out after an unlawful detainer has been granted, particularly if you agree to pay ongoing rent for the duration.
Image courtesy of Tim Patterson