Will bankruptcy stop an eviction in New York City?
It is not uncommon for people with severe debt to also fall behind on their rent payments. When you are already swimming in bad debt, one of the scariest things that can happen is being threatened with an eviction from your landlord. A pending eviction can tip the scales for consumers that have already been considering bankruptcy, and prospective clients often come to us wanting to know if filing for bankruptcy will stop an eviction.
The short answer is yes, filing for bankruptcy can allow you to stay in your rental home despite an eviction proceeding. Whether or not the eviction will be entirely stopped depends on whether your landlord has a judgment of possession against you.
When a bankruptcy case is filed an “automatic stay” is immediately imposed that prevents your creditors from contacting you in their collection attempts. Landlords however have been given some legal exemptions against this automatic stay as it relates to evictions, so the timing of your bankruptcy filing will have an effect.
If the bankruptcy is filed after your landlord has obtained a judgment of possession against you then the “bankruptcy stay” is not automatic. On page three of the bankruptcy petition you will be asked if your landlord has a judgment of possession against you. If so, then to stop the eviction you must declare that under New York state bankruptcy laws you have the legal right to cure the default. At this time you will also need to leave a deposit with the bankruptcy court clerk for the amount of rent that will be owed to your landlord within 30 days of the filing. You will then be given another 30 days to repay all past due rent owed to your landlord even if they have a judgment against you- effectively buying you some time and preventing the eviction. A qualified bankruptcy attorney will have multiple repayment strategies to offer you, some more aggressive than others, and all based on your budget.
Filing for Bankruptcy in New York City to stop eviction
Now filing for bankruptcy before your landlord obtains a judgment of possession against you will provide you with the most legal protection to stop an eviction and is advisable whenever possible. When describing the historical case law and special provisions around evictions and bankruptcy proceedings the “Consumer Law and Practice, Volume 1 section 184.108.40.206 states, “…these provisions thus underline that, when a lessor is adequately protected, nothing in the Code requires granting the lessor relief from the automatic stay and imposing the hardships of eviction on a bankruptcy debtor.” In other words, if you file prior to an eviction, and have satisfied the bankruptcy clerk, then the automatic stay will be upheld, and your landlord will not be able to collect on the past due rent without petitioning the court for a hearing of their own- again effectively buying you more time in your home and giving your bankruptcy attorney a chance to help you eliminate your past due rent.
Your particular financial situation will also weigh on your ability to prevent a pending eviction with a bankruptcy. You may be best suited with a Chapter 7, or possibly a Chapter 13. It may be possible to entirely eliminate your past due rent, or come up with a payment plan that will satisfy you and your landlord and allow you to stay in your home.
In any event bankruptcy law as it relates to tenant evictions can be very complicated. It is of the utmost importance to work with a qualified bankruptcy attorney that can provide you with a range of options based on your finances and a confidential attorney client relationship.
If you live in New York, and are facing an eviction or see one coming please give the Law Offices of William Waldner a call at 212-244-2882to arrange a free bankruptcy consultation today.
We have many specific strategies regarding repayment and avoiding evictions and are experts finding ways to keep people in their rental homes.
This article is intended for educational purposes only. By reading this article no attorney-client relationship has been created.