Can a Landlord Evict You for Filing Bankruptcy?

Your landlord can evict you when you file for bankruptcy if they have an eviction judgment before you file. However, if the landlord does not yet have an eviction or unlawful detainer judgment, filing for bankruptcy will pause the eviction proceedings.

If you already filed for bankruptcy, the automatic stay generally prevents your landlord from starting or continuing an eviction lawsuit, unless an exception applies or the bankruptcy court grants stay relief. Depending on the case and the property involved, the stay may end when the case closes or is dismissed, or when the court grants or denies a discharge.

However, there are some exceptions when your landlord can evict you, even after filing for bankruptcy. For more information about handling your eviction notice while filing for Chapter 7 bankruptcy, talk to a local bankruptcy lawyer for legal advice.

What Happens To Your Rental Agreements When Filing Bankruptcy?

If you file for Chapter 7 or Chapter 13 bankruptcy, you may have trouble paying rent, but bankruptcy will not change your lease. You will still have the same payment terms and lease expiration date. Instead, filing for bankruptcy gives most renters legal protections against lease termination or eviction.

For most renters, filing for bankruptcy does not change their lease or rental agreement. You and your landlord are still bound by the terms of your lease agreement. This includes the rental term, rental amount due and due date, occupants, and what happens at the end of the lease.

If you keep paying your rent on time during bankruptcy, your landlord will generally have no reason to evict you, as long as you follow your lease terms. However, your landlord may think twice about renewing your lease given your financial issues.

If you stop paying rent after filing the bankruptcy petition, you violate your lease. Even if your landlord cannot start eviction proceedings because of the automatic stay, it does not stop your ongoing obligation to pay rent. Bankruptcy discharges your past debts, not debts you continue to accumulate.

After bankruptcy, you can expect your landlord to evict you or not to renew your lease for failure to pay rent. You may also have a hard time finding a new place to rent because bankruptcy will show up on your credit report.

Does a Bankruptcy Automatic Stay Stop an Eviction?

Filing for bankruptcy initiates an automatic stay on collection actions. An automatic stay temporarily pauses lawsuits, debt collector calls, wage garnishments, foreclosure, and other creditor actions.

Under the Bankruptcy Code, an automatic stay also applies to residential evictions. Under 11 U.S.C. § 362 (22), filing for bankruptcy operates as a stay of the continuation of any eviction, unlawful detainer action, or similar proceeding. However, filing for bankruptcy does not automatically stay an eviction the landlord obtained before you filed the bankruptcy petition.

Can a Landlord Lift the Automatic Stay for an Eviction?

Your landlord can try to lift the automatic stay to evict you. If you continue not to pay rent, the landlord can ask the federal bankruptcy court to lift the stay so the eviction process can continue.

There is also a specific exemption under the Bankruptcy Code for property endangerment or illegal drug use. To qualify, the landlord must file a certification with the court that the tenant has endangered the property or illegally used or allowed controlled substances on the property.

What If My Landlord Already Has a Judgment for Possession?

If your landlord already has a judgment for possession court order after going through the eviction process, filing for bankruptcy generally won’t stop law enforcement from physically evicting you from the property.

A judgment of possession isn’t considered a collection action because your landlord already went through the legal eviction process.

Is Back Rent Unsecured Debt in Bankruptcy?

Bankruptcy discharges most unsecured debt, including medical bills, credit card bills, and personal loans.

Under bankruptcy law, past-due rent is generally considered unsecured debt. If you have significant past-due rent, bankruptcy may discharge eligible back-rent debt, depending on the type of bankruptcy and any applicable discharge exceptions.

Lease Negotiations with Chapter 7 and Chapter 13 Bankruptcy

You may be able to negotiate your lease with your landlord when going through bankruptcy. If you are having trouble making the full rental payments on time, you can try to negotiate a payment plan that covers all past-due rent. Your negotiation strategy may depend on the type of bankruptcy you file.

Chapter 7 Lease Negotiations

With Chapter 7 bankruptcy, the bankruptcy court appoints a trustee. The bankruptcy trustee takes control of the bankruptcy estate, which includes all your non-exempt property and assets. The trustee liquidates your assets and uses the money to pay off your creditors. If you receive a discharge, it eliminates many prepetition debts, but some debts may remain nondischargeable.

If your landlord won’t negotiate, your bankruptcy will discharge all prior unsecured debts, which may include back rent. You can negotiate to keep the lease and avoid eviction by offering a payment plan that includes a portion of the unpaid back rent, allowing your landlord to recover more than they would without renegotiating the lease.

Chapter 13 Lease Negotiations

Chapter 13 bankruptcy is known as wage-earners’ bankruptcy. This is for individuals who continue to earn an income, but their debt is unmanageable based on their income. With Chapter 13, the bankruptcy judge approves a repayment plan to make regular payments to creditors. After completing the repayment plan, an eligible filer may receive a Chapter 13 discharge, although some debts are not discharged.

Your landlord has no obligation to renegotiate your lease. Your landlord can ask to lift the stay for nonpayment or wait until the automatic stay is up before filing for eviction. It helps if you are on good terms with your landlord, honest about your situation, and willing to work with them to address their concerns.

Avoid an Eviction or Lease Termination

If you have already filed for bankruptcy, talk to your landlord. Tell your landlord if you intend to remain in the property and offer assurances that you will pay the rent on time during the bankruptcy process. If you are on good terms with your landlord, you may be able to negotiate new, temporary lease terms to get you through the eviction process.

If you have a fixed-term lease and you are not behind in rent (or violating lease terms), your landlord has no cause to terminate your lease or evict you. Under a month-to-month lease, your landlord can terminate your lease according to state and local notice requirements. Your landlord can evict you at any time for cause, including nonpayment of rent.

The bankruptcy automatic stay pauses eviction proceedings, but not indefinitely. Your landlord can evict you after your bankruptcy case is over, or ask the court to lift the stay to go ahead with your eviction during your bankruptcy.

If you have not filed for bankruptcy, but plan to, notifying your landlord may cause them to speed up any eviction proceedings. If they manage to get a judgment of possession before you file for bankruptcy, the automatic stay will have no effect.

Get Legal Advice from a Bankruptcy Lawyer

Bankruptcy is a stressful process, but it can give you a fresh start. Pay the rent on time and do what you can if you want to stay in your rental property during the bankruptcy process. It is generally more difficult to get approved for a new rental after bankruptcy because of a low credit rating.

Contact a local bankruptcy attorney for more information on how to avoid an eviction when filing bankruptcy.