Florida Tenants Facing Eviction Can Use This Sneaky Bankruptcy Trick to Stay In Their Homes!
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The COVID-19 pandemic has been difficult for all Floridians. Hundreds of thousands of people lost their jobs and businesses closed at an alarming rate. People also lost their homes, as they could not pay their rent and were in fear of eviction.
At the time, Governor DeSantis placed a moratorium on evictions and foreclosures, so people would not fear losing their homes when there were shelter-in-place orders in effect. Unfortunately, those moratoriums are long over and they are not expected to go into effect again.
With so many people still struggling, there are still many Florida residents in fear of losing their homes. To prevent this from happening, it is natural to wonder if bankruptcy could help you avoid eviction or stop foreclosure. Like with so many other legal questions, the answer is that it depends. If you want to avoid eviction and think bankruptcy may be an option, you should speak to a Florida bankruptcy attorney as soon as possible.
Bankruptcy Will Provide an Automatic Stay
As soon as you file for either a Chapter 7 or Chapter 13 bankruptcy, the court will issue an automatic stay in your case. An automatic stay prevents creditors and debt collectors from contacting you trying to collect on the debt you owe. As its name suggests, the automatic stay happens right away, which means as soon as you file, all contact will stop. Unfortunately, while the automatic stay will prevent creditors from contacting you, it does not always work the same for landlords who are trying to collect on the rent, or even evict you.
Automatic stays do not last forever and in the case of landlords, the time period may be very short. Landlords do have the right to ask the bankruptcy judge to lift the automatic stay on rent immediately, and many courts will grant these requests. If this happens, the landlord can start the eviction process all over again, and you may be evicted from your home.
Even when an automatic stay is lifted, it takes time for it to happen. You can use this time to find another place to live if you feel as though the eviction will go through. If you think you will be able to make any payments for past due rent, you can also use that time to collect it and give yourself the best chance of staying in your home.
If you filed a Chapter 7 bankruptcy, there is a chance your landlord may even simply wait until the bankruptcy case is over to evict you, which could take three to four months. Once the case is final though, your landlord will likely have the right to evict you from the premises if there is still unpaid rent.
It is important to note that an automatic stay will not stop an eviction if your landlord has already obtained a final judgment for eviction against you before you filed for bankruptcy. Automatic stays only apply to the debt you had on the date you filed bankruptcy.
Bankruptcy Can Eliminate Unpaid Debt
Filing Chapter 7 bankruptcy can delay an eviction, but it will not necessarily stop one. However, after you are evicted, a Chapter 7 bankruptcy can eliminate any unpaid rent debt you still owe. You also will not have to pay rent for the current premises going forward, as you will no longer have a lease agreement. It is for these reasons that many people consider bankruptcy when trying to avoid eviction. If you are paying too much rent, a Fort Lauderdale bankruptcy attorney can help you walk away from it and get a fresh start.
Eliminating rental arrears can also make it easier for you to find a new place to live. You may need the first and last month’s rent, as well as a security deposit and the other fees associated with moving. Bankruptcy will also allow you to discharge other types of debt you may be carrying, such as credit card debt, personal loans, and unsecured medical debt. Getting rid of these debts can also free up some money that can help with finding a new place to live.
While many benefits come with filing bankruptcy to avoid eviction, there are certain consequences you should know about, too. For example, any type of bankruptcy will appear on your credit report, and future landlords will likely look at this to determine if they want to rent to you. To avoid this, some people try to find a new place to live before they file for bankruptcy.
Chapter 13 Bankruptcy Can Help You Avoid Eviction
Although a Chapter 7 bankruptcy may not help you avoid eviction, a Chapter 13 bankruptcy can. When filing Chapter 13, you are not asking the court to discharge your debt, but you are asking them to reorganize it into a repayment plan. Your rent, including what you owe and what you will owe in the future, can be part of this repayment plan, allowing you to stay on the premises.
The repayment plan is also drafted using your income and your current expenses, so the payments are affordable for you. You must make any payments according to the repayment plan. If you do not, your landlord can complain to the bankruptcy trustee and your case may be dismissed. In that case, your landlord could continue to pursue an eviction and you likely would not be able to file bankruptcy again to stop it.
Call Our Bankruptcy Lawyer in Florida Today
Bankruptcy may be able to stop an eviction, but the process is a long and difficult one. There are also many benefits and some drawbacks to filing, so it is important to speak to a South Florida bankruptcy attorney who can advise on the specifics of your case. At Loan Lawyers, we have helped thousands of borrowers successfully pursue bankruptcy, and we want to put that experience to work for you. Call us today at (954) 523-4357 or contact us online to schedule a free consultation.
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