Bankruptcy Laws for Tenants
If you happen to be a renter and have to file for bankruptcy in 2011, you don't quite get the protection your debts do once bankruptcy is finalized. Due to the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, your landlord is given more power to evict you as result of your bankruptcy. Whether your landlord can evict you, though, will depend on a couple of circumstances, including slightly different state bankruptcy laws.
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Filing for Bankruptcy at Last Minute
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If you can't pay rent and your landlord manages to impose an eviction notice against you, filing for bankruptcy at the last minute used to grant you an automatic stay, or legal grounds of blocking the eviction. With the new 2005 federal bankruptcy law, the landlord still has the power to evict you if you do a last-minute bankruptcy.
State Exceptions
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According to the Nolo website, some state bankruptcy laws will allow you to evoke the automatic stay anyway with a quick bankruptcy. The only way this can happen is if you happen to file for certification of automatic stay, plus pay some back or future rent during the bankruptcy process. Consult your bankruptcy attorney on whether your state bankruptcy laws have this option. Your landlord may fight this in the bankruptcy court.
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Bankruptcy Before Eviction Notice
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When you file for bankruptcy long before your landlord sends you an eviction notice, federal law says you have a right to uphold the automatic stay against eviction, temporarily. However, under federal law, your landlord still has a right to lift the automatic stay if you haven't paid any back or future rent. The landlord will have to go to the bankruptcy court to ask the judge to lift the automatic stay, which likely could be granted. The Bankruptcy Law Firms website states this compounds if the landlord presents evidence showing you've violated your rental agreement, such as harming the property or using illegal drugs. You have 15 days to file an objection.
Bankruptcy While Still Paying Rent
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It could be that you filed for bankruptcy while still keeping up with your rent. If this is the case, you won't have to worry about evictions. But the bankruptcy trustee you work with during the bankruptcy procedure may decide to terminate your rental lease if he thinks your rent is exorbitantly high. And you still need to prove to your current landlord that you can meet future rent after bankruptcy. Nevertheless, the trustee could force you to find more modest rental housing if it's proven in your bankruptcy that you were living beyond your means.
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