The short answer is MAYBE… As with most things in life, timing is everything, and my personal advice about when to file Bankruptcy is – the sooner you do it, the better off you are. This philosophy is especially important when you are behind on your rent payments.
Failure to pay rent will almost immediately result in an eviction notice – the “Notice to Pay Rent or Quit” acts as a warning of what is about to come. Most importantly, it requires that you immediately pay your past due rent and any late charges due under your rental agreement. Failure to pay all amounts due by the expiration of the notice will allow your landlord to file a complaint for a “Forcible Detainer” in the county justice court. This is an accelerated lawsuit to get the apartment back from you, so the landlord can re-lease it and get a judgment for all amounts due to the landlord. Once you are served with the complaint by the Constable or Sheriff you will be required to appear at court to state your case for why you are behind on your payments. Unless you have a good reason and the ability to pay the rent and other fees that have been incurred, the court will enter a judgment against you. Soon after, the Constable/Sheriff will be back to give you another notice of the day when you will be locked out of your home.
When you file for Bankruptcy the law provides for an “Automatic Stay” against collections, as soon as you file your case. This Stay will stop your eviction temporarily, just how temporary the stop is depends on when you filed your case. If your landlord already went to court and got a judgment against you – the Bankruptcy Stay will only apply to the execution of the judgment if the Debtor has the right to reinstate the lease by paying all past due rent and fees in the judgment within 30 days of filing their bankruptcy case. The debtor will need to pay the court 30 days rent and file a statement that provides for payment of the balance due under the judgment by the end of the 30 days. Failure to do the two things above will mean that your Stay will not apply to your eviction and your landlord can proceed with eviction immediately. Conversely, if you file your case BEFORE a judgment is entered against you, the Stay goes into effect immediately when you file and your landlord must cease the eviction process. The landlord can seek approval of the court to resume the eviction but that will take a number of weeks. During that time, you may have an opportunity to obtain alternative housing arrangements or negotiate a settlement of the rental default with your landlord.
Bankruptcy is complex and successfully navigating the potential risk and rewards requires the assistance of experienced legal counsel. Contact LoBue Law, PLLC for a free consultation and case evaluation today.