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Falling on hard times and not being able to pay your bills is an awful feeling. Even more awful is the thought of being evicted because you defaulted on rental payments for your apartment, condo, or house. Instead of feeling defeated and giving up on the home you are living in, be proactive. Even though defaulting on a rental payment is not an ideal situation to be in, you still have options that can be pursued competently and efficiently with the assistance of a Philadelphia bankruptcy lawyer. Continue reading to learn more about ways to save yourself and your family from being evicted.

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How Does the Automatic Stay Help with Eviction in Bankruptcy?

When a tenant has defaulted on rent and anticipates the receipt of an eviction notice or has already received one, one avenue to pursue is to file for bankruptcy with help from a Chapter 7 bankruptcy lawyer or Chapter 13 bankruptcy lawyer in Philadelphia. The word “bankruptcy” has a negative connotation to most people, however in this case, it could not only dissolve a balance for rent that is past due, but it could also buy more time before the tenant must move out. As long as the tenant is not being evicted because of endangering the property or using illegal drugs on the property, filing for bankruptcy in Pennsylvania will trigger the automatic stay, delaying eviction proceedings. It should also be noted that the tenant must file for bankruptcy before a landlord receives a judgment for possession. Otherwise, the automatic stay will not operate in the tenant’s favor.

Once an automatic stay is in place, all efforts at collecting past-due rent and any eviction proceedings will be halted. The automatic stay will remain in effect until:

  • A creditor has made a request to the court and a judge grants this request.
  • The case is dismissed, closed, or discharge is granted to the tenant.

Pausing any eviction proceeding that was going forth is beneficial for the tenant because it allows for more time to make plans to move out. The time between filing for Chapter 7 bankruptcy and being discharged of debts is approximately 90 to 120 days. This gives a tenant the opportunity to live on the premises for about four months without paying rent before being evicted. Furthermore, any subsequent action by the landlord to evict can no longer contain a request for money damages because the discharge of debts granted to a tenant through filing for Chapter 7 bankruptcy discharges obligation on a residential lease. The landlord will only be able to receive an order for possession.

Tenants who file for Chapter 13 bankruptcy have about six months to decide whether they want to assume the terms of the residential lease or evacuate the premises. Typically, if a tenant decides to reject the residential lease and leave the premises, repayment of rent is rarely enforced. In order to actually evict a tenant from the premises in a Chapter 13 bankruptcy case, the landlord must first seek relief from the automatic stay.

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Exceptions to the Automatic Stay

The first exception to an automatic stay that follows a tenant filing for bankruptcy is if a landlord already has a judgment of possession against a tenant. In this scenario, a landlord may pursue the eviction of the tenant regardless of the bankruptcy filing. Nevertheless, a tenant may be able to challenge this action by filing and serving a petition within 30 days of the filing date certifying that:

  1. Circumstances exist that would allow the tenant to cure the monetary default that gave rise to the judgment of possession.
  2. The tenant has deposited rent that became due during the 30-day period following the filing of bankruptcy.

The automatic stay will remain in place, if the tenant certifies within the 30-day period that the default has been cured.

The second exception to the automatic stay is if the reason for the eviction is that the tenant has either been endangering the property or engaged in illegal drug activity on the premises. In order for the cessation of the automatic stay to remain, a landlord must file a certification with the court that states either that the eviction action has been filed or that the tenant endangered the property or engaged in illegal drug activity within 30 days prior to the petition date. Thereafter, relief will be granted to the landlord within 15 days of the filing of the certification. The only exception to this is if a timely response is filed by the tenant, and at a subsequent hearing the tenant proves that the landlord’s reason for eviction has been remedied.

Philadelphia Bankruptcy Attorneys Can Help with Foreclosure and Eviction

Time is of the essence when you fear that you could be evicted from your rental property. Defaulting on rental payments is not as hopeless a situation as it seems. Save yourself time and money by contacting the Philadelphia Chapter 7 bankruptcy lawyers at Sadek and Cooper Law Offices, LLC. For a free legal consultation, call our law offices today at (215) 995-2543.