“E” in the Bankruptcy Alphabet is for “Eviction”

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By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com Web: westchesterbankruptcyattorney.org

“Can I Stay in My Apartment if the Landlord Sues to Evict Me for Back Rent and Wins if I File Bankruptcy?”

Before  2005, the answer was clearly “yes”…a tenant bankruptcy could easily stop an eviction by filing for a Chapter 7 or Chapter 13 bankruptcy even after an eviction judgment had been entered against the tenant in state court. Once the tenant filed for bankruptcy, the “automatic stay” prevented all creditors, including landlords, from pursuing the repayment of debt.

But in 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) changed all that. The last three words of the title of the Act (“Consumer Protection Act”) are no more than legislative window dressing  as the new provisions relating to evictions found within Title 11 of the United States Code at Sections 362(a)(22), 362(a)(23), 362(l) and 362(m) are some of the harshest changes facing consumers under the new law.  The landlord can now evict a tenant if the landlord obtains a court-ordered judgment for possession prior to the tenant filing for bankruptcy. There is no longer an automatic stay to protect the tenant against the landlord unless the narrow exception described below applies.

If the eviction is for the nonpayment of rent, an exception applies if state law allows a tenant to remain in the rental unit and “cure,” or pay the rent, after an eviction judgment. Most states do not however even allow this “pay to stay” (as I will call it for simplicity’s sake) option.

If the tenant in pay to stay a state pays the rent into court and files the certification, on the day that the bankruptcy petition is filed (and serves the certification on the landlord), the tenant gets the benefit of the bankruptcy “automatic stay” but only for a period of thirty days from the date that the bankruptcy petition is filed.

If the tenant wishes to remain in the apartment beyond the initial thirty day reprieve, the tenant will have to satisfy the amount stated in the judgment for possession within thirty days following the filing of the bankruptcy petition and must at the same time file a certification with the bankruptcy court that the tenant has paid this amount (and serve the certification on the landlord). However, even here if the landlord objects to either certification and in court, the tenant must still leave.

The bottom line is that if tenants who are facing eviction in non-pay to stay state due to monetary default are in essence forced by BAPCA to gamble for if they lose in the state court level, they will have no avenue of relief open to them in the bankruptcy court.  (In a pay to stay state the gamble is less onerous if the tenant is successful in jumping through the hoops described above.) If on the other hand, they choose to forgo their day in court in favor of the safer route of filing bankruptcy, they are facing considerable expense for the privilege of staying in their apartment.

Additionally, filing bankruptcy destroys credit and thus can make it much more difficult if not impossible to find a new apartment.  The better counsel for most tenants facing eviction may be to preserve their credit and their cash and simply find a new home.

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  

I also provide Mortgage Modification Services.