If you are struggling financially, then you may fall behind in your rent payments. With New York rents being so high, it is not unusual for a distressed consumer to go into arrears simply to put food on the table. This means that you will eventually receive a notice of eviction from your landlord.
For many filers, this is the event that makes them finally decide to declare bankruptcy. With a pending eviction and nowhere else to go, they wonder if filing for Chapter 7 or Chapter 13 will prevent their landlord from going through with it.
In short, filing for bankruptcy in New York can make it possible for you to remain in your apartment or rented house even though your landlord has started the eviction process. When you file, it creates an automatic stay that prevents most creditors from pursuing collection actions against you. If your landlord has been trying to evict you for nonpayment of rent, then the stay will prevent the eviction until the bankruptcy court can review the situation.
There are, however, situations in which the automatic stay will not stop your eviction from going through. They include:
- The landlord has successfully requested the bankruptcy court to lift the automatic stay for your rental debt. This happens more often than you would think, especially when you file for Chapter 7: your tenancy can’t be seized and liquidated to repay your creditors, so courts are inclined to support a landlord’s property rights.
- You endangered the property or used illegal substances on the premises. The bankruptcy court will have little sympathy for your situation and decline to stay an eviction action if you damaged the property or used illegal drugs during your tenancy.
- Your landlord obtained a judgment of possession before you filed for bankruptcy. Under New York state law, however, tenants are allowed to correct a rent default even after their landlord gets this judgment. When you file for Chapter 7 or Chapter 13, you must also file a certification indicating that New York allows this post-judgment curing of a default and serve a copy on your landlord. You then deposit the amount of rent payable within 30 days with the clerk at the bankruptcy court. Within 30 days after your bankruptcy filing, you have to pay all the past due rent and file a certificate confirming that you’re current on your rent.
If you are thinking about dealing with your financial situation by filing for bankruptcy, then contact an experienced New York bankruptcy attorney to review your eviction situation. Your attorney will advise you on the best way to preserve your tenancy while ensuring that you understand how bankruptcy will affect your situation. Jayson Lutzky is a personal bankruptcy lawyer with an office in the Morris Park area of the Bronx. If you are considering filing for bankruptcy, then contact his office at 718-329-9500 to set up a free in-person consultation. Saturday appointments are available.