When you file for bankruptcy, you immediately qualify for an automatic stay against creditor actions. This includes landlords evictions. Depending on why you’re being evicted, the automatic stay can buy you significant time to either come up with money or move out of your rental without being forced out by your landlord. In this article, we discuss Texas tenants’ rights in eviction proceedings, and how bankruptcy may help your situation.

What Happens If I File for Bankruptcy Before an Eviction?

In order to remove you from the premises, your landlord must file a suit against you and state the reason why they want to reclaim possession of the premises. This is called an eviction proceeding. The court will rule on the legality of the eviction and make a determination as to if an when you will be removed from the landlord’s apartment.

When you file for bankruptcy, any such action against you (including eviction or foreclosure) must stop. If you’ve filed for bankruptcy before the landlord could file for eviction, then the eviction would either be postponed until after the bankruptcy has settled or the landlord has the choice to petition the court to lift the automatic stay granted by the bankruptcy.

What Happens If I File for Bankruptcy During or After an Eviction?

Whether or not the bankruptcy stops an eviction depends entirely on when you filed in relation to the eviction judgment. If the landlord has already received a judgment for the right to possession (the eviction has already been granted by the court), then filing for bankruptcy will not stop the eviction process.

However, if the landlord has filed for eviction and not yet received a judgment from the court, the eviction process will be stopped in its tracks by the automatic stay granted in bankruptcy.

What Is an Emergency Filing?

An emergency filing allows you or your lawyer to file an incomplete bankruptcy in order to activate the automatic stay. You can file the rest of the paperwork later. In other words, the court doesn’t require that you have every piece of information in order to stop creditor actions against you. Moving quickly is your best chance to stop an eviction or buy yourself enough time to repay the delinquent rent that you owe.

Texas Tenants’ Rights and Delinquent Rent

Texas does not have very tenant-friendly laws. On the other hand, Texas does have very debtor-friendly laws. If you are delinquent in rent, a landlord can issue a three-day notice to either pay the delinquent balance or quit the lease. If you quit the lease, don’t pay the rent, or ignore the notice, the landlord can immediately initiate an eviction against you. You’ll need to move quickly and file for bankruptcy immediately if you wish to retain possession of your apartment.

If Your Landlord Fights the Automatic Stay

When you file for bankruptcy, it affords you an automatic stay to creditor actions including eviction, but the creditor (in this case, your landlord) can file to lift the automatic stay when the circumstances make sense.

When do the circumstances make sense? The court will usually grant the motion to lift the automatic stay if:

Your landlord is evicting you due to a lease violation and not delinquent payment of rent

In cases where you have violated the lease, the landlord will claim that their decision to evict was not based on economic factors. Bankruptcy is designed to protect you from creditors, not landlords per se. If your landlord is booting you for some other reason, then they will likely be able to lift the automatic stay and proceed with the eviction.

They successfully argue that there is illegal activity on the premises

The court will lift the automatic stay if the landlord argues that one of the primary reasons for evicting you is the presence of illegal activity on the premises. This can include drug use on the property. However, the landlord has the burden of proving that there is illegal activity on the property and they can’t just want into your apartment to prove it.

You cannot pay your back rent

The landlord will likely allege that you cannot pay the delinquent rent in order to lift the automatic stay. The automatic stay is in place in order to allow you to deal with mounting debt. If the landlord is in the midst of filing an eviction against you, and you have no means of repaying the landlord, the court might grant the landlord’s petition to lift the automatic stay.

You’re filing for Chapter 7 bankruptcy

Chapter 7 bankruptcy discharges the debts against you and, in most cases, without having to repay back the debts that qualify for a Chapter 7 discharge. This includes past rental fees, surcharges, and rent owed via the lease agreement. While your lease may still hold you liable for a full year’s worth of rent, Chapter 7 will successfully discharge that debt. If you file for Chapter 7, however, the landlord is likely going to assume that you have no intention of paying off your delinquent rent and, if that’s true, then the automatic stay can likely be lifted and eviction can proceed.

Can Bankruptcy Help Me Keep My Rental?

It can, but you need to be upfront with your landlord about your financial situation and you need to make the right choices moving forward. If you do file for bankruptcy and want to keep your apartment, Chapter 13 will be the better option because it works on a three- to five-year repayment plan. In other words, you’re showing that you will be repaying the debt owed to your landlord. In addition, Chapter 13 can discharge some of your unsecured debt.

A Dallas bankruptcy attorney at Allmand Law Firm, PLLC can help you file for bankruptcy if you have to or negotiate with your landlord. Most landlords do not want the hassle of an eviction. To learn more about bankruptcy, Texas tenants’ rights, and your options, contact us today.