When financial burdens become too much and tenants fall behind on their rent – they may be forced to file for bankruptcy. This can be extremely frustrating for everyone involved. As a landlord – what are the steps that you should be taking after your tenant files for bankruptcy?
In the past, tenants could avoid eviction by invoking “automatic stay” – a policy that allowed all collection proceedings to stop, allowing them to stay in their apartment until a judge lifted the automatic stay policy. Fortunately, The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was enacted to helps make it easier for you, as a commercial landlord, to evict a bankrupt tenant. Now, you can proceed with eviction if you have already obtained a judgment of possession prior to the tenant filing for bankruptcy or there was an eviction based on endangerment (i.e. illegal use of substances, they had a pet when they were not allowed).
What You Should Do:
- If you have not won a judgement for eviction before your tenant filed for bankruptcy, you will need to set a hearing to remove the automatic stay.
Set a Date for a Hearing to Remove Automatic Stay. During this hearing, you will need to ask the judge to remove the automatic stay before you can evict the tenant.
- If you know that your tenant has used illegal drugs or has endangered the property, you can proceed with the eviction.
If a tenant falls under this exception, you do not need to win a judgement. Instead, you can proceed with the eviction. You will need to prepare a certification that the tenant has violated this – and if they do not file an objection to it within 15 days of being served, you can proceed without going to court.
At Thomas Weiss & Associates, P.C., we are experienced in handling all matters related to property disputes and transactions. We handle everything from mortgage foreclosure actions to landlord/tenant dispute. If you find yourself in need of legal assistance, do not hesitate to reach out to our office by calling 1-516-586-0244 or by visiting our website and filling out our contact us form.