Bankruptcy and Its Impact on Eviction
People can get behind on their rent for all sorts of reasons including:
- You or your partner could have lost a job
- One of the household’s earners passed away
- Someone became too injured or ill to work
- Or unexpected debt obligations came up
As soon as you fail to make rent, however, your landlord may threaten to kick you out. Although they’re legally prohibited from changing the locks or moving your stuff outside of the building, eviction proceedings can be swift. Once your landlord obtains a judgment in their favor, there’s very little you can do to protect your current living situation.
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That’s why those who are facing eviction should consider their options as soon as they become aware of their landlords’ intentions. You might not think it’s possible, but you can significantly slow down or even stop eviction while getting rid of certain debts that have become too unbearable.
Can Filing for Bankruptcy Stop the Eviction Process?
Bankruptcy probably isn’t the first thing people consider when they think about putting a stop to their eviction, but it can provide this benefit while addressing some of the underlying causes of their financial hardship.
Remember that Bankruptcy can help you wipe out:
- Credit card balances
- Medical debt
- Personal loan debt
- And other types of consumer debt including past-due rent
When Does an Automatic Stay Take Effect in California?
When someone files for Chapter 7 or Chapter 13 bankruptcy, an “automatic stay” takes immediate effect. This “stay” is legal protection against your creditor’s attempts to collect the money you owe them, including your landlord’s attempt to evict you for not making rent.
The protection also doesn’t just prevent your landlord from trying to collect the rent you already owe them.
Should I Stay or Should I Go?
Bankruptcy can buy you time by slowing down the eviction process, but the chapter of bankruptcy for which you file can depend upon whether you wish to stay in your living situation or move out as soon as your bankruptcy case settles.
If you don’t wish to stay in your dwelling beyond bankruptcy, Chapter 7 might be a good way to make a clean break. Your past-due rent, late fees, and other costs can be forgiven, and Chapter 7 allows you to leave before your lease is up without incurring liability. An important consideration, however, is that the hit to your credit may make it hard to find somewhere else to stay.
If you don’t wish to move even after your bankruptcy case is settled, filing for Chapter 13 might be more appropriate if you otherwise qualify. Chapter 13 allows you to reorganize your debt and pay it off during a three-to-five-year period. During this period, your landlord is unable to evict you as long as you pay them according to the plan. Any debt you owe after the plan’s completion can even be wiped out!
Learn More about Your Legal Options Today
There are a variety of ways in which bankruptcy can help you pave a path toward a better life and a stronger financial future. If you want to learn more about these and other benefits of filing for bankruptcy, reach out to Denton Law Group for assistance today.
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