Bankruptcy Questions Answered: Can Bankruptcy Stop Eviction?

If you’re facing eviction and find yourself in tough financial circumstances, you could be wondering if filing for bankruptcy in Ohio could help your situation. As is true with so many legal questions, the answer could be yes, no, or maybe, depending on your unique circumstances. In this article we’ll uncover the truth about eviction and both chapter 7 and chapter 13 bankruptcy.

Bankruptcy Before Eviction and The Automatic Stay

When it comes to filing for bankruptcy in Ohio, timing can either streamline or complicate your experience. If you owe your landlord back rent and you aren’t able to repay it, then it’s likely that you’re having other financial problems that have led you to this point. Maybe you’re even considering filing for bankruptcy. This is a good time to meet with a trusted bankruptcy attorney to learn about your best options. In general, if you have not yet been served an eviction notice, filing for bankruptcy would put in place an automatic stay order. This court order would prevent your landlord from collecting rent or evicting you for 30 days.

Bankruptcy After the Eviction Notice

If you have already been served with an eviction notice and the days are now counting down for you to leave your rented home, filing for bankruptcy can still prevent eviction, there are simply some additional steps to take. This isn’t true in every state, but when filing for bankruptcy in Ohio post-eviction notice, you are granted the option to “cure” your owed rent by bringing payments up-to-date. To do this you would file a certification document with the court, deposit a rent check with the court for the amount of rent that will be due once the automatic stay ends, and then present your landlord with a copy of your certification. 

That said, no matter whether you file for bankruptcy before or after being served with the eviction notice, your landlord has the right to petition the court to remove the stay. They might do this if they claim that illegal activity is happening on the property you’re renting, or that you are endangering their property. Should a landlord claim this, it will result in a mandatory hearing and your landlord will need to prove why they claim that the stay should be lifted.

Eviction in Chapter 7 vs Chapter 13

When filing for bankruptcy in Ohio to avoid eviction, your end goal of either staying in or leaving your current home could affect whether you opt for chapter 7 or chapter 13 bankruptcy. In all reality, the automatic stay may only delay the inevitable, and if you cannot work things out with your landlord, you may still need to move on after the stay is lifted. In the end, you may just buy time to be able to find a new place to live, while also using bankruptcy protection to clean up your financial situation. In this case, chapter 7 bankruptcy may be the best option to discharge debt and move on.

However, if you really are hoping to stay in place, a chapter 13 bankruptcy filing can enable you to get up to date on payments while also creating a plan that will repay past-due rent payments. Your landlord will then have to accept a repayment plan as prescribed by the court, which will give you the time you need to rectify your financial situation without worrying about finding a new place to live. 

Eviction and Bankruptcy In Ohio: The Bottom Line 

In most eviction cases that coincide with filing for bankruptcy in Ohio, the most common outcome is buying a bit of extra time to find another place to live and allow time for moving day. More often than not, a landlord may not be open to working with a tenant, whether that is because they don’t want to deal with the possibility of being owed money in the future, or because a tenant has unauthorized pets, has been causing disturbances for neighbors, or has otherwise been causing issues. In cases like these, a landlord may just wish to part ways. However, in cases where a landlord and renter can reconcile, bankruptcy can help the tenant to stay put in their home while also being able to move forward financially. It isn’t necessarily realistic to expect that filing for bankruptcy will get you the best of all worlds, but it can happen. One way to get the best outcome possible is to work with an experienced Ohio bankruptcy lawyer who will negotiate on your behalf. 

Get Your Bankruptcy Questions Answered By an Experienced Bankruptcy Attorney

If you’re facing eviction and are wondering if filing for chapter 7 or chapter 13 bankruptcy might help your situation, it could be time to consider hiring an Ohio bankruptcy lawyer. James Hausen and his experienced team of legal professionals can help you to determine the best course of action. Give us a call or fill out our online contact form and we will be in touch. Hausen Law is happy to serve all of Northeast Ohio, including the Akron, Canton, Cleveland, Wooster, Dover/New Philadelphia, and Youngstown communities. Contact us today to set up a free consultation.