Does Chapter 13 Bankruptcy Stop Evictions?

Does Chapter 13 stop evictions?
Information in this article does constitute legal advice, is for informational purposes only and may not constitute the most up-to-date information. Readers should contact their attorney for advice to any particular legal matter.

While Chapter 13 bankruptcy can temporarily stop an eviction, it's effectiveness is case-specific. Therefore, it is essential to understand that the resolution of rent-related issues in Chapter 13 is complex and may only sometimes result in a permanent stay of eviction proceedings.

At What Point Does Filing for Chapter 13 Bankruptcy Halt an Eviction Process?

Filing for Chapter 13 bankruptcy triggers the automatic stay, which acts as a barrier to creditors seeking to obtain debt. This protection requires court approval before taking any action.

As a rule, the automatic stay in place during the entire Chapter 13 bankruptcy case. In some circumstances, the automatic stay may not apply. So, it is crucial to consult with a legal professional to fully understand the scope of the automatic stay in your specific case.

Although filing for a Chapter 13 bankruptcy can provide temporary relief from an eviction, there are certain conditions that you must meet to get temporary relief from an eviction.

If the eviction process has yet to advance to the point where the landlord has obtained a judgment for possession, and if the eviction is not related to dangerous conditions on the property, you may be able to catch up on your rent.

Your landlord may still request for the automatic stay to be lifted before the final eviction proceedings reach a final stage. They can do this by filing a motion and demonstrating that their interests are not safe without the ability to evict you. 

Re-paying Past-Due Rent as Part of Your Chapter 13 Bankruptcy Repayment Plan

To maintain the stay, you must continue to pay your current rent and keep up with future rent payments. You can prevent eviction by catching up on back rent through your Chapter 13 bankruptcy plan. 

The landlord will require you to treat back rent as a priority in your Chapter 13 repayment plan. In some cases, the landlord may resist working with you, resulting in the filing of a motion to lift the automatic stay.

Judges evaluate various factors when deciding whether or not to lift the stay. Such factors include your ability to maintain current rent repayments while making your Chapter 13 plan payment each month.

Your budget must show that you have enough income to cover your Chapter 13 payment, rent, and expenses. 

Laws vary by state. Therefore, a bankruptcy attorney comes in handy in helping you understand the potential outcomes of your case depending on state requirements. 

Ascend can assist you in finding a bankruptcy attorney within your locality. Our professionals offer free initial consultations. Contact us to speak with our professionals and get the correct information. You will be protecting your rights without incurring additional costs.

Alternatives to Consider if You Are Unable to Meet Your Rent Obligations

Bankruptcy may be your best solution if you're struggling with debt and need to catch up on your rent payments. Back rent falls under the category of unsecured debt, meaning that if you decide to move, you can include these payments in your bankruptcy case.

You may be able to discharge your back rent payments if there is no evidence of any fraudulent activity under your Chapter 13 bankruptcy. You can eliminate the back rent and start fresh without incurring debt.

Under Chapter 13 bankruptcy, a portion of back rent payments is paid through a repayment plan. The percentage paid depends on what you can afford. For instance, if you can pay 10% to unsecured creditors, your landlord would receive 10% of the back rent.

Upon completion of the Chapter 13 plan, the remaining balance of the back rent gets discharged. 

What Is the Outcome If I am Unable to Make My Rent Payments Following the Filing of a Chapter 13 Bankruptcy?

Suppose you cannot afford rent payments while in a Chapter 13 plan- what next? 

It's essential to consult your bankruptcy lawyer as soon as possible. A change in financial circumstances could mean that you no longer have enough income to continue with Chapter 13.

You can switch to a Chapter 7 bankruptcy plan if you cannot afford rent payments in Chapter 13. An attorney can help assess your situation and determine the best action.

Switching a Chapter 13 bankruptcy case to a Chapter 7 case is a cost-effective option compared to dismissing the existing Chapter 13 case and filing for a new Chapter 7 bankruptcy case.

When filing for a new Chapter 7 case, one must complete the credit counseling and debtor education courses. These procedures can be time-consuming and add to the overall expense. 

Besides, the legal fees associated with refiling a case might surpass the cost of converting the existing Chapter 13 case to a Chapter 7 case. Additionally, the conversion filing fee is much more affordable than the price for filing a new bankruptcy case.

Safeguarding Your Residence When Seeking Bankruptcy Protection

One of the significant hurdles in addressing debt problems is maintaining a roof over your head. As a renter, your rented accommodation is your dwelling. Bankruptcy offers a solution to avoid homelessness.

Discharging your debts gives you more funds for rent or mortgage payments. If you want to relocate, filing for bankruptcy can relieve you of the burden of mortgage and unpaid rent. 

Refrain from acting or attempting to tackle debt problems without legal guidance to make the situation worse. Therefore, seeking the help of a bankruptcy attorney is a crucial step toward regaining financial stability.

We are dedicated to assisting you in freeing yourself from debt. We offer a range of services to meet your needs. If you require information on debt relief options, contact us by call or via our online platform. You can also take advantage of our bankruptcy decision portal, which is available at no cost.

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