Can I file a Southern California Bankruptcy to Delay a Residential Eviction? It Depends….

Posted by on Aug 8, 2013 in Chapter 11 Bankruptcy Issues, Chapter 13 Bankruptcy Issues, Chapter 7 Bankruptcy Issues, Creditor's Rights in Bankruptcy, Foreclosure & Bankruptcy | 12 comments

So if you are a tenant renting an apartment, house, condo, or whatever may represent your residence, and you find yourself late on renting or unable to fulfill the lease agreement, be prepared to find yourself facing an eviction, otherwise known as an unlawful detainer action.

11 USC 362(b)(2)) says that the automatic stay doesn’t apply to tenants who file bankruptcy where the landlord already has obtained a judgment for possession prepetition.   That means if a tenant, who lost an unlawful detainer action, files a last second bankruptcy to stall the sheriff from booting him out, the automatic stay doesn’t apply to stop or delay the sheriff from doing so.

Furthermore, 11 USC 362(l)(5)(A) requires a debtor tenant certify on the bankruptcy petition that the landlord holds a prepetition judgment of eviction.   The reasons are clear: Congress determined it wanted clear rules in place so that the automatic stay pursuant to 362 of the BK Code could not be abused by evicted tenants trying to delay the inevitable where there was no longer a legal right to possession with respect to the property.

11 USC 362(l)(1) indicates that the provisions of 362(b)(22) will be upheld after 30 days from the date of filing where the lessor certifies that the debtor has a right to cure under nonbankruptcy law and that the debtor deposited with the clerk of the court, any rent due during the 0 day period after the BK filing.

Regardless, it’s clear that a tenant who files bankruptcy to delay an eviction could be subject to certain risks in ignoring the fundamental provisions of the bankruptcy code.   Both landlords and tenants need to understand these basic principles inherent in the bankruptcy code so that all parties play fair if the bankruptcy process is involved.






12 Responses to “Can I file a Southern California Bankruptcy to Delay a Residential Eviction? It Depends….”

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