Bankruptcy Laws


A common question about eviction arises when dealing with Chapter 7 bankruptcy filing. With the automatic stay in place can eviction be done? In the past, people filed for a Chapter 7 bankruptcy when they are facing eviction. By filing a Chapter 7 bankruptcy, the automatic stay would go into effect stopping the sheriff from carrying out the eviction order. So, is eviction stopped when a Chapter 7 bankruptcy is filed?



While the automatic stay will halt the eviction order, the landlords have the rights to go into court and ask the judge to life the automatic stay and let the eviction process resume. However, most evictions are stopped because landlords don't know their rights to lift the automatic stay. That's why filing for a Chapter 7 bankruptcy saved people from eviction in the past. However things are different now.

Under the new bankruptcy laws and the new Chapter 7 bankruptcy laws, it is easier for landlords to evict. The new bankruptcy laws allow the landlords to evict the tenants whether there is an automatic stay or not if:

  • the landlord got a judgement for possession before the Chapter 7 bankruptcy is filed, or
  • the eviction is done because the tenant is endangering the real estate property or the tenant is using illegal controlled substances on the property.

In either case, if a Chapter 7 bankruptcy is filed, the landlord can still ask the court to life the automatic stay and the court usually grants that request.

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