Renters who are behind on their rent and having trouble paying their bills may wonder if filing for bankruptcy might be a solution. The short answer is yes, it can be. Renters who anticipate being evicted or depending on where they are in the eviction process could possibly be able to place a stay on their eviction during their bankruptcy filing. Filing for bankruptcy pauses most legal actions the debtor is facing, including eviction. What happens next will depend on what type of bankruptcy the individual files.
Filing for Chapter 7 bankruptcy can protect a debtor from eviction while the bankruptcy case is proceeding. This can give the debtor several months to work out a new agreement with the landlord or find a new living situation. In many circumstances, the landlord would rather work with the current tenant (even with financial problems) rather than going through the process of having the tenant evicted. Evictions are very costly and time consuming so if an arrangement can be worked out between you and your landlord it’s best to reach out to them and discuss options.
Especially true if you are in a good relationship with your landlord and have kept the property in good shape/repair and have a good record of paying your rent in the past. Chapter 7 bankruptcy is sometimes called a “fresh start” bankruptcy because it allows the debtor to erase most of their debts by the court. Past due rent is a type of debt that can generally and usually be discharged in Chapter 7. Other types of debt include credit cards and unsecured personal loans. By getting rid of these other types of debts it can make it easier to pay your rent and ease your financial burdens.
An individual who has the cash flow needed to keep making rental payments while also catching up on past due payments and wants to stay in their current rental may want to file for Chapter 13 bankruptcy. Chapter 13 bankruptcy sets up a 3-5 year court-supervised repayment plan that’s designed to get the debtor caught up on his debts and financial obligations
There are circumstances where filing for bankruptcy won’t help with the eviction process. It may not be effective in stopping or pausing the eviction if the landlord has already started the process of eviction and/or if the renter has endangered the rental property. If a court judgment has already been issued for eviction against the renter before filing for bankruptcy then the renter must vacate the property. Once things have reached this point a bankruptcy filing will not pause the eviction. This is why it’s so important for individuals to see an attorney regarding their financial strains as soon as possible.
Eviction can proceed very quickly in the state of Alabama. It’s critical to act quickly in order to stop an eviction proceeding in its tracks. As you can see there can be many variables that can affect how bankruptcy may assist with delaying or avoiding an eviction and the type of bankruptcy (Chapter 7 or 13) that can best serve the renter’s needs. The best way to start this process is with a consultation with an experienced bankruptcy attorney in Montgomery. If you have already been served a notice of eviction or that an eviction suit is underway, then there is no time for delay.