April 9, 2020
Aside from helping an individual wipe out debt (such as credit cards), bankruptcy can also help individuals delay or stop evictions in Los Angeles caused by the failure to pay rent. The effect of the bankruptcy on an eviction depends on the Chapter of the bankruptcy filed, but generally, in order to completely prevent an eviction, the rent must be repaid. If there is a failure to pay the rent that is due, a Los Angeles Bankruptcy Attorney can assist with the filing of a bankruptcy, which will not avoid an eviction but will instead delay it.
Stopping an Eviction by Curing the Amount of Rent that Is Due
If you are facing an eviction in Los Angeles, but would like to stop that eviction completely, you can do so by curing the amount of the unpaid rent that is due. The Bankruptcy Code provides that the tenant can stop the eviction by taking the following steps:
1) File a certification, or a sworn statement, with the bankruptcy court stating that state law allows a tenant to stay in the rental unit and pay the delinquent rent after the issuance of an eviction judgment;
2) Deposit with the bankruptcy clerk the amount of rent that will be due 30 days from the filing of the petition; and
3) Serve the landlord with a copy of the certification.
In a Chapter 13 bankruptcy, the tenant may be able to include the unpaid rent through the “plan of reorganization” and pay that unpaid rent over time (provided the debtor can afford to do so).
Delay on Evictions in Los Angeles Through the Automatic Stay
Individuals who file a bankruptcy are always given what is arguably the biggest benefit of a bankruptcy – the “automatic stay.” The automatic stay prevents any attempts to collect on a debt (including any attempts to proceed with an eviction). However, note that the automatic stay can terminate by way of the creditor (or the landlord) filing a motion with the Court, asking the Court to vacate the automatic stay. Generally, if the Debtor cannot cure a default on the rent, the Court will, more often than not, grant the creditor’s (landlord) motion for termination of the automatic stay (aka: Motion for Relief from the Automatic Stay). As it normally takes several weeks to bring forth the Motion, and have it heard by the Court, the Debtor will be able to benefit from the automatic stay for those few weeks.
Bankruptcy Cases Filed After Eviction Proceedings are Concluded in State Court
One important thing to note is that if a bankruptcy is filed after an eviction lawsuit was completed in state court, the automatic stay that is intended to benefit the Debtor may not come into effect. The bankruptcy code specifically provides as follows: the automatic stay does not apply to a residential landlord’s “continuation of any eviction, unlawful detainer action, or similar proceeding” in which it “has obtained before the date of filing of the bankruptcy petition, a judgment for possession of such property” against the tenant. To learn more about whether bankruptcy and how it can affect an eviction, contact a Los Angeles Bankruptcy Attorney now!
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