Thursday, August 21, 2008

Evictions and Bankruptcy

Question: I lost my house to foreclosure and I am facing eviction. Will bankruptcy help me?

Answer: Filing for bankruptcy creates a court order called the automatic stay that stops most collection actions, including eviction lawsuits. However, filing bankruptcy will only protect you for a short period of time and the bankruptcy reform laws passed in 2005 make it easier for landlords to proceed with evictions.

If the landlord already has a judgment of possession against you, the automatic stay will not help you. Landlord can complete the eviction process and have you removed from the property.

If the landlord does not yet have a judgment of possession, the automatic stay might give you an extra few days or even weeks. However, the landlord can ask the bankruptcy court for relief from the automatic stay to complete the eviction. Unless you have substantial legal arguments under state law to stop the eviction, the court will probably agree to lift the stay.

The bottom line: bankruptcy may help you delay an eviction, but you should try to avoid having both a bankruptcy and an eviction lawsuit on your credit rating.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

1 comment:

Unknown said...

It should be noted that the new bankruptcy law, it is now easier to throw the tenants, so there is still a good chance that the eviction will happen, but it may be delayed for the tenant to provide alternative accommodation .

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