When you feel like you are drowning debt, it's easy to see how bankruptcy could seem like a viable option. After all, there are few other legal remedies that can make nearly all of your debts disappear and allow you to begin again. While being hounded by creditors can make your life miserable, there are not many problems more pressing than the possibility of being kicked out of your home. Bankruptcy could present a solution for preventing an eviction, but it really depends on your landlord's actions. Read on for a better understanding of how a chapter 7 filing could affect an eviction.
Telling your creditors to "stay": Only a bankruptcy offers you the opportunity to stop creditors in their tracks. From the very second your chapter 7 federal filing hits the clerk's office, your creditors must cease their collection actions. This legal maneuver afforded by a bankruptcy filing is called, appropriately enough, an automatic stay. The effect of the automatic stay on evictions depends on whether your landlord (or property management company) has taken legal action against you yet.
No filling: This is one instance where it pays to take quick action if your finances have gotten out of hand, since who gets to the courthouse first is important. If you manage to file for your chapter 7 bankruptcy before your landlord files for an eviction, you may have a reprieve, if only temporarily. You will know if an eviction has been filed, since you should receive notice of the filing.
It's only temporary: While filing first should buy you some more time and keep you in the home for a few months, the landlord could likely proceed with the eviction as some point. The details varies by state, so take a close look at tenant-landlord law in your state and consult with your bankruptcy attorney, but you may able to take action to "cure" the rent arrears and make the eviction go away. Thanks to the filing, you may now have more access to cash than you did before your filing. You no longer need to pay those high minimum payments on credit cards, for example; that is money that can be put toward securing a place to live.
The landlord has filed: The automatic stay won't help you if your landlord filed paperwork before you did. You might be able to contact them and offer to pay the behind rent as well as an additional deposit and the court costs for the eviction in order to stay in the home. Whatever you do, do it quickly since you may only have a few days or weeks to vacate the home after the filing.
Speak to your bankruptcy attorney to learn more about avoiding eviction.