By Aaron Finter
There were more than 1.5 million personal bankruptcies filed in 2010, with the majority of them being Chapter 7 bankruptcies. Chapter 7 and Chapter 13 filings most certainly encompass mortgage companies and residential landlords as well as credit card companies along with other financial institutions.
For Chapter 7 and Chapter 13 debtors, one of the greatest advantages of bankruptcy is relief from the “automatic stay” on debt collection efforts. Once a bankruptcy petition is filed by the debtor and their attorney, all debt collection activity must cease per law. Debt collection efforts for past-due rent and eviction proceedings would be included in the automatic stay as well. The automatic stay legally protects debtors, yet it presents a significant problem for landlords. If you try to collect your rent or evict someone after the automatic stay has been put into effect, you can be subject to legal penalties.
All chapters of the U.S bankruptcy code impose the “automatic stay” of all collection activity and enforcement proceedings. Furthermore, the automatic stay protects the debtor by preventing the enforcement of eviction proceedings or other action – without at first, receiving permission from the bankruptcy court. Early on, in bankruptcy proceedings the debtor is given the option to either terminate or keep their unexpired leases.
Under Section 362 (b) (22), the automatic stay will cease automatically 30 days following the bankruptcy filing date to allow landlords to continue any eviction or unlawful detainer action against a tenant where the landlord has already obtained a judgment for possession against the tenant prior to the bankruptcy filing.
If the tenant wants to stay in your property, they can request that the stay on the eviction be continued. They will have to provide information to the court explaining what led to their default, and they will have to show the court that they can deposit the money for the rent. Once the tenant comes up with the money, the court can choose to continue the stay against the conviction.
Under Section 362 (b) (23), of the Code, the automatic stay does not apply to eviction actions which are based on the endangerment of the property or the illegal use of drugs on the property. If this is the case, then the landlord will have to file a certification with the Court explaining that the eviction has been filed or, within 30 days prior to the petition date; the debtor either used illegal drugs on the property or somehow endangered the property. If the court sides with the landlord, relief from the stay can be granted 15 days of the filing of the certification.
The only way around the automatic stay is to actually go to court and file a motion for a relief from automatic stay. An experienced Phoenix real estate attorney will be able to help represent you in court and file a motion for relief from automatic stay. If your motion is granted, you can move forward with the eviction process and reclaim your rights to your property.
At Finter Decker, PLLC, they have worked with clients on all aspects of real estate law including residential and commercial properties. At their firm, they believe that every client is important, no matter how large or how small their situation is, all clients deserve dedicated and professional attention. Since they have handled all types of commercial and real estate transactions, they are prepared to handle your case with individualized attention, in a precise and expedient manner. Mr. Finter is not only a skilled real estate lawyer, he happens to have an active real estate license as well, which affords him the ability to have a broad understanding of real estate law. Contact a Phoenix real estate lawyer from their firm for more information about you landlord’s rights today!
Article Source: http://EzineArticles.com/?expert=Aaron_Finter
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