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THE LAW OFFICE OF MARK J. MARKUS

Los Angeles California Bankruptcy Lawyer*
Practicing exclusively bankruptcy law since 1991
Free phone consults.  Office in Burbank.
*Board Certified Specialist in Bankruptcy Law

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Does Bankruptcy Help Stop Rent Evictions In Los Angeles? Mark J. Markus

2021-09-03T12:34:05-07:00August 27th, 2021|

During the COVID-19 Pandemic, landlords were prevented from evicting tenants for nonpayment of rent.

Thousands of renters in Los Angeles County and across the country stopped paying rent months, and in some cases, years ago.

And landlords could not do anything about it.

Until now.

After a recent US Supreme Court decision (pdf), that moratorium is coming to an end, and landlords will soon be able to start unlawful detainer actions to evict tenants.

How To Stop An Eviction Due To Nonpayment Of Rent

Filing bankruptcy can at least temporarily stop an eviction proceeding if possession has not already been awarded to the landlord.

I say “temporarily” because if you want to stay in your current home, you will have to catch up on the past due amounts in order to stay.

It also depends on what stage you are in the eviction process (in legal terms called an “unlawful detainer”).

If the landlord has not yet filed an Unlawful Detainer (UD) action, the automatic stay which goes into effect when your bankruptcy case is filed, prevents the landlord from commencing the UD action.

But the landlord can rather easily get permission from the bankruptcy court to proceed.

This is called obtaining “relief from the automatic stay”.

Do You Want To Stay In Your Home Or Move Elsewhere?

The basic decision you must make is whether you want to remain in your current home, in which case you must catch up on the past due rent, or move out and not owe anything further to the landlord.

If you want to stay, there are different options available for curing the default (catching up) on the past due rent.

How Chapter 7 Bankruptcy Affects Evictions

Chapter 7, is a basic bankruptcy where you give up any assets which are not “exempt” in return for eliminating your dischargeable debts.

Usually all assets are exempt, but whether they would be in your case can be determined by your bankruptcy attorney.

Past due rent can be eliminated in Chapter 7.

So you can move out and not have to pay anything further to your landlord.

But if you want to stay, you are required to basically provide for payment of any past due amounts within 30 days of filing your case.

If you don’t, the landlord can obtain relief from the automatic stay to proceed with eviction.

How Chapter 13 Bankruptcy Affects Evictions

Chapter 13 is a bankruptcy for individuals and self-employed business owners.

To qualify for Chapter 13, you must have regular income and less than $419,275 in unsecured debt and less than $1,257,850 in secured debt.**

Chapter 13 enables you to propose a repayment plan to your creditors, based in part on your ability to pay.

It also allows you to catch up on necessary past due rent over a period of time (36 to 60 months).

Of course you have to additionally stay current with rent payments which accrue after your case is filed.

**These amounts are increased every few years.

Frequently Asked Questions About Evictions

Below are answers to Frequently Asked Questions about evictions and bankruptcy:

Can I catch up on past due rent payments over time?2021-08-27T15:52:09-07:00

Yes.  In a Chapter 13 or Chapter 11 case, you can provide for catching up on past due rent over a period of time (typically 36-60 months in Chapter 13, and potentially longer in Chapter 11).

Will Bankruptcy Stop An Eviction?2021-08-27T16:15:03-07:00

Yes.  The automatic stay in bankruptcy will temporarily stop any eviction IF the case is filed before the eviction process has terminated your rights to possession of the property.   How long the protection lasts depends on which bankruptcy chapter you file and whether you provide for catching up on the past due rent amounts.

See more information on evictions in bankruptcy.

Can I Eliminate or Discharge Rent Debt Owed To My Landlord In Bankruptcy?2021-08-27T15:47:31-07:00

Yes! Any bankruptcy chapter enables you to discharge rent obligations owed to a landlord.  Of course, if you don’t pay your rent, the landlord has the right to evict you.

What is the automatic stay?2021-08-27T16:15:29-07:00

The automatic stay is an injunction that goes into effect automatically upon the filing of a bankruptcy.  It prohibits the commencement or continuation of any acts to collect on a debt that arose prior to filing the bankruptcy. This includes enforcement of judgments, creating or perfecting liens, debt collection (such as wage garnishment and levies) and many other actions.  (It does not apply to collecting alimony or other domestic support obligations).

 

 

 

Photo credit:

“OccupyHomesMN protest to defend a home against foreclosure eviction” by Fibonacci Blue is licensed under CC BY 2.0

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About the Author:

Attorney Mark J. Markus has been practicing exclusively bankruptcy law in Los Angeles, California since 1991. He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization, AV-Rated by martindale.com, and A+ rated by the Better Business Bureau.
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