If I File for Bankruptcy, Will it Stop My Eviction? Here are the Facts:
There are many times when an individual is faced with serious financial troubles and ends up with a pile of debt. In such situations, if you have been unable to pay your house rent for a considerable period, the worst that can happen is getting an eviction notice from your landlord. Now, the prospect of becoming homeless is threatening enough to put you under extreme anxiety.
Going the legal way is the only possible means of trying to come out of the situation and it is here that you could consider filing for a bankruptcy without delay.
Bankruptcy is a process of relieving you from your debts by preventing creditors from pursuing you further for debt repayment. It involves liquidation of your assets and giving you a scope for a fresh start. With regards to eviction also, bankruptcy can help. If you file for bankruptcy, let’s see as to how and to what extent it can stop an eviction.
How Can Bankruptcy Help in Delaying an Eviction?
At the very initial stage, let us say that a bankruptcy can delay the process of eviction if not stop it entirely. Just as a bankruptcy is filed with the help of a qualified bankruptcy lawyer, the court issues an automatic stay order.
This automatic stay order immediately stops the bill collectors from either contacting you or collecting payments from you. The automatic stay order also puts a hold on the pending lawsuits against you. As such, you might be having active eviction proceeding against you at that point of time but the automatic stay order will pause your eviction case as well. This stay order remains active for as long as the bankruptcy proceedings are going on.
What If There is a Motion for Relief?
While you can file for bankruptcy and stop the eviction case with an automatic stay order, your landlord too can choose to fight back. As a creditor, he can file a motion granting relief from the automatic stay. A relief would no longer prevent him from collecting payments from you.
Once this motion for relief is filed, you are required to respond and explain your side of the story. Court proceedings follow and if the verdict is in the favor of your landlord, then you have no other way but to continue with the eviction case.
How Important is Timeline in Bankruptcy & Eviction?
The extent to which you can stop an eviction process by filing for a bankruptcy largely depends on when you file it. Now, if the landlord has already been awarded a judgment of possession against you after filing the eviction case in court, there is not much that your bankruptcy filing can do.
This is because, with the judgment of possession, your landlord becomes entitled to ignore the automatic stay and go ahead with the collections. It is for this very reason that bankruptcy lawyers always suggest filing bankruptcy as early as possible for it to be effective in your case.
Does Filing for Bankruptcy Discharge Unpaid Rent?
Discharge of unpaid rent can be possible depending on which chapter of bankruptcy you file. In a bankruptcy, chapter 13 specifically, the unpaid rent is usually added to your repayment plan. For instance, your payment amount is reduced or your time period is stretched over a longer one, making it easier for you to afford the payment.
In chapter 7 bankruptcy, on the other hand, it is likely that your unpaid rent is completely discharged, leading to this debt getting entirely erased. This is possible because chapter 7 involves a discharge of all your debts by selling off your assets to pay the secured debts that cannot be forgiven.
Why Is It Necessary to Consult a Bankruptcy Attorney?
Filing for bankruptcy is a complex legal procedure that considers several aspects of a situation. So, when you think of filing for bankruptcy, you should waste no time in seeking the advice of a bankruptcy attorney.
An attorney can analyze your financial situation, go through the nuances of your case and come up with the best- possible way of dealing with the crisis. He/she can prepare and put forward the case in a way that maximizes its chances of success. The Philadelphia bankruptcy attorneys understand your dire situation and are ever willing to help you overcome the financial crisis.
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