In this post we'll continue our look at the intersection of bankruptcy and landlord/tenant law and the issues that primarily affect renters.
In our last post we examined how the automatic stay can prevent landlords from evicting renters while their case is being decided by the bankruptcy court. We discussed how the automatic stay will apply unless (1) your landlord obtained a judgment for possession before your case was filed, or (2) you used certain controlled substances on the premises or otherwise endangered the property.
Unfortunately, landlords can petition the bankruptcy judge overseeing your case for a removal of the automatic stay. This is referred to as "lifting the stay". Landlords have this right and judges are often sympathetic to their requests in this regard. Why is this?
The reason is that in the view of the law your eviction will not affect your property for the purposes of bankruptcy. Remember that when you file for bankruptcy, the trustee takes a hard look at your property to see what if anything can be converted into cash in order to pay your creditors. Your tenancy cannot be converted into cash. Since it doesn't technically affect your case courts often allow landlords to enforce their property rights.
Fortunately, however, many landlords do not have counsel and do not realize they have the right to ask the judge to lift the automatic stay.
