Nobles Law Firm

Bankruptcy and evictions

types-of-bankruptcyTenants facing eviction clearly have financial problems and, of course, people struggling with paying their bills sometimes file for bankruptcy.

If a tenant files for bankruptcy while a landlord is attempting to evict him or her, the property owner might have a problem. That is because the automatic stay in a bankruptcy case generally stops such proceedings in their tracks.

So, does that mean that a landlord stuck with a nonpaying tenant can either do nothing or spend a fortune in legal fees trying to get a bankruptcy court to allow an eviction to proceed? No. Fortunately, there are some options available to landlords that want to evict tenants in spite of an automatic stay.
An automatic stay will not prevent an eviction if a landlord already has a writ of possession in hand. The writ of possession, of course, is one of the first things a landlord receives in an eviction case. After the case is filed and the tenant is served with a complaint and notice of intent to issue a writ of possession, he or she has five days to file an answer and pay any past due rent into the court registry.

Tenants usually don’t file those answers or pay back rent, so a writ of possession is a fairly easy thing to get from the court. The writ of possession means the landlord can remove the tenant from the property with the help of the local sheriff’s office and the automatic will not prevent that writ from being executed if it was received before the bankruptcy case was filed.

If a landlord wants to evict a tenant after a bankruptcy case has been filed, then things more complicated. The landlord can file a motion from relief from automatic stay and generally get it, but keep in mind that the filing fee for one of those is $176 and the chances of getting that money back from the tenant are slim to none. If the court grants that motion, then the landlord can proceed with the eviction proceeding in circuit court.

In the alternative, 11 U.S.C. §364(b)(23) is a landlord’s friend. That law states that a landlord who certifies that a tenant is endangering the property or using illicit drugs on it can pursue an eviction free and clear of the automatic stay. Keep in mind that the certification must be filed under oath – it is not worth committing perjury to remove an unwanted tenant from your property. It is worth mentioning that those “protection of property” motions can be filed without the $176 filing fee required for a motion seeking relief from the automatic stay.

A troublesome tenant who files a bankruptcy can delay an eviction, but landlords do have some options. A bankruptcy might delay an eviction, but it doesn’t necessarily stop one completely.

This column was authored by Ethan C. Nobles and originally appeared in the Oct. 6, 2015, edition of the Daily Record in Little Rock.

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