The Practical Lawyer

October 5-11, 2015

Bankruptcy and evictions

By Ethan C. Nobles

Tenants 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 file those answers and 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 stay 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 many of those motions, 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 get relief from the automatic stay and pursue an eviction. 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.

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.

Ethan C. Nobles is an attorney in Benton focusing on real estate, evictions, contracts, wills, trusts, incorporations and other areas of law as the mood strikes. You can reach him at Ethan@NoblesLawFirm.com or visit him on the Internet at NoblesLawFirm.com.