You are behind on your rent and the landlord has started legal proceedings against you. How would filing bankruptcy affect the proceedings?
As your Maryland bankruptcy attorney I often work with clients facing eviction. The key question in determining what rights and protections my bankruptcy clients can avail themselves is whether a judgment for possession has been entered.
NO Judgment for Possession
Some clients are conscious enough to seek help from my office, a Maryland bankruptcy lawyer, as soon as they receive the landlord’s Complaint for Rent. This is critical because the requirements for stopping the eviction process, even though temporarily, are easier to accomplish.
A bankruptcy filing before judgment is entered affords the debtor the power of the automatic stay under 11 U.S.C. § 362. This means that the landlord cannot proceed with the eviction process without permission from the bankruptcy court. The landlord has to file what is known as lift stay motion requesting the court the authority to continue the eviction case against the debtor.
In practice, as your Baltimore bankruptcy lawyer I know that this means that the debtor can buy a month or more to regroup and get back on his/her feet. The time to regroup is the precise goal of the automatic stay and the entire bankruptcy process. It gives the debtor time to consider his/her options with a gun to their head.
Judgment for Possession ENTERED!
Once the landlord obtains a judgment before the debtor files a bankruptcy case the process is entirely different. It is also much more difficult for a lot of debtors to go through.
Under this scenario, as your Baltimore bankruptcy lawyer I am quick to point out the requirement of 11 U.S.C. §362(l) (1) (B). This section states that when a landlord has a prepetition judgment of possession, the debtor can take advantage of a 30-day stay of eviction by depositing with the court at the time of the filing, rent that comes due in the next thirty days. In simpler terms, one must pay a month’s rent with the bankruptcy filing.
In addition, the debtor has to cure the rent arrears during that 30 day period otherwise the automatic stay expires giving the landlord the green light to proceed with eviction under 11 U.S.C. §362(l)(2).
As you can see, once landlord has judgment for possession some debtors would not be in a position to comply with the requirements. Therefore, it is important that potential debtors take action at the earliest possible opportunity to maximize the benefits afforded under bankruptcy law.
This is a general overview and is not meant as a comprehensive discussion. For this reason and others, it is always a good idea to speak with a knowledgeable Maryland bankruptcy lawyer to get answers specific to your situation.
Joseph K. Githuku
Maryland Bankruptcy Lawyer
Baltimore Bankruptcy Lawyer
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Disclaimer: This article is provided for informational purposes only and should not be construed in any way as legal advice. This article does not create an attorney-client relationship.