Seek Legal Help To Stop Eviction Through Bankruptcy

In Phoenix, Arizona, when people are struggling with money problems and face the threat of being kicked out of their homes, they might wonder: “Does bankruptcy stop eviction?”. 

Bankruptcy is like a legal reset button for people who can’t pay their debts, while eviction is the process landlords use to remove tenants from their properties. In Phoenix, where the economy and housing market can affect how people manage their finances, it’s crucial to know if bankruptcy can stop eviction. 

To figure this out, we must analyze bankruptcy rules, how eviction works, and what local courts say about it. By understanding these rules and procedures, people facing eviction in Phoenix can better understand their options. 

Short Summary:

  • Bankruptcy doesn’t always stop eviction, but it might offer temporary relief.
  • The automatic stay in bankruptcy filings can temporarily halt eviction proceedings.
  • Chapter 7 bankruptcy may delay eviction for a few weeks to a few months.
  • Filing for Chapter 13 bankruptcy can establish a repayment plan to settle overdue rent.
  • Certain situations, like landlord obtaining possession judgment or alleging property damage or drug use, may exempt eviction from bankruptcy protection.

What is Bankruptcy?

Bankruptcy has two sides. Legally, it’s a court process to help debtors facing overwhelming debt. There are different types, and rules vary by location. More generally, bankruptcy means being financially insolvent, owing more than you can repay. It’s distinct from being short on cash, as bankruptcy is a legal procedure.

What is Eviction?

Eviction is the legal process by which a tenant is forced to leave a rental property. That typically happens when a tenant breaches the terms of their lease agreement, most commonly by failing to pay rent. The landlord goes to court and obtains a judgment for possession. With the help of law enforcement, they remove the tenant and their belongings from the property.

Can I Be Evicted After Filing For Bankruptcy?

In Arizona, a landlord can only start eviction by filing a lawsuit. However, if you leave your rental property by yourself or give it back to the landlord voluntarily, they won’t need to give you an eviction notice. 

When you file for bankruptcy, something called an “automatic stay” kicks in right away. That means creditors, including landlords, can’t take any action to collect debts from you. Most legal actions against you are also put on hold.

So, when you file for bankruptcy in Arizona, your landlord can’t take you to court for unpaid rent, and they can’t start an eviction lawsuit against you. Even if the landlord already started the lawsuit before you filed for bankruptcy, the automatic stay stops it. 

If you file for bankruptcy before the eviction process is finished, the automatic stay puts a pause on it.

Can I Prevent Eviction By Filing Chapter 7 Bankruptcy?

Yes, but using Chapter 7 bankruptcy as a solution to stop eviction has limitations. The bankruptcy process offers only temporary relief unless you live in a state where eviction can be cleared post-landlord judgment.

Typically, Chapter 7 cases last around four months, marking the longest period you can expect the bankruptcy filing to delay eviction. However, many landlords may not wait for the conclusion of the Chapter 7 case. 

Instead, they may file a motion to lift the automatic stay or submit other documents to the court, explaining reasons why the automatic stay should be lifted to allow eviction proceedings to resume. In most instances, bankruptcy judges grant the landlord’s request. 

That means the bankruptcy filing primarily gives you a brief respite to either catch up on rent or find alternative housing. The timeline ultimately hinges on how quickly the landlord pursues their petition and their urgency to regain possession of the property.

Will Filing For Chapter 13 Bankruptcy Stop Eviction?

Yes, if you file for Chapter 13 bankruptcy before the landlord obtains a judgment, the bankruptcy court will install the automatic stay. However, this stay is typically temporary. Chapter 13 doesn’t offer a mechanism for tenants to keep their residence in the property.

Under Chapter 13, landlords are entitled to receive past due rent within a “reasonable” timeframe, often interpreted by most courts to be around 30 days. If you can’t reach an agreement with your landlord during this period, you’ll likely need to vacate the premises.

How Chapter 13 Bankruptcy Can Establish a Repayment Plan for Unpaid Rent?

Even when you file for Chapter 13 bankruptcy, your debts remain acknowledged by the courts. However, this route lets you create a structured repayment plan for settling overdue rent. It affords you valuable time to stabilize your finances and settle outstanding bills, enabling you to remain in your house. 

Chapter 13 bankruptcy typically offers a repayment plan spanning three to five years to address rental arrears. Like Chapter 7, Chapter 13 also halts home foreclosure proceedings and creditor harassment.

Are There Situations In Which Bankruptcy Will Not Stop An Eviction?

There are two scenarios where bankruptcy won’t halt an eviction. First, if the landlord already obtained a court order for possession of the property before the bankruptcy filing. This court order gives the landlord the right to take over the property. If this order is secured before the bankruptcy, then typically bankruptcy won’t prevent the landlord from carrying out eviction procedures.

Second, if the landlord alleges that you’re endangering the property or engaging in illegal drug use on the premises. In such instances, bankruptcy doesn’t block the landlord from proceeding with eviction after you’ve filed for bankruptcy. 

For the landlord to use this exception, they must submit a sworn certification to the court confirming these allegations. Here’s what happens:

  • The landlord files a document with the court stating the eviction reason as recent drug use or property damage (within the last 30 days).
  • If you don’t object within 15 days, the eviction can proceed.
  • If you object within 15 days, a court hearing is scheduled within 10 days where you can argue against the eviction.

For How Long Will Bankruptcy Stop An Eviction?

The outcome varies depending on the type of bankruptcy you’re filing. If you opt for Chapter 7 bankruptcy, the automatic stay – which temporarily halts eviction proceedings – usually ends once you receive your discharge, typically about four to five months after filing for bankruptcy. 

The landlord can request permission to evict you sooner, a request the court typically approves. Consequently, Chapter 7 bankruptcy may delay eviction anywhere from a few weeks to several months. While this delay might suffice if you need time to secure new housing, it might not be ideal for long-term eviction prevention.

If you choose Chapter 13 bankruptcy, you can halt eviction for the rest of your lease term, provided you prove sufficient assurance that you will adhere to the rental agreement, including clearing any outstanding rent payments. 

In Chapter 13, although the landlord can still request permission for eviction, it’s less likely to be granted, especially if you maintain regular rent payments post-bankruptcy filing.

Contact Our Phoenix AZ Bankruptcy Attorney Now!

Does bankruptcy stop eviction in Phoenix? That will depend on factors like the type of bankruptcy and the situation with your landlord. While bankruptcy can sometimes give you a break from eviction for a bit, it might not always keep you from being evicted in the long run.

If you’re facing eviction and thinking about bankruptcy, it’s wise to talk to Phoenix Fresh Start Bankruptcy Attorneys. Our Phoenix bankruptcy law firm offers a free, no-obligation, stress-free financial analysis of your finances to help you figure out the best way forward. Don’t hesitate to contact us for help and start working toward a brighter financial future today!