Consumer Bankruptcy:

Automatic Stays and Residential Leases

Under the old bankruptcy law, the bankruptcy stay applied to residential leases; under the new bankruptcy law, the issue is slight more complex. In the event that a landlord has already attained a judgment for possession by the time the tenant has filed for bankruptcy, the bankruptcy stay does not prevent the landlord from proceeding with the eviction 30 days after the petition was filed, unless the debtor has 1) a right to cure, 2) has actually cured any failure to pay rent, and 3) has deposited the rent for the next month with the clerk for the Bankruptcy Court.
The bankruptcy stay, under the new bankruptcy law, does not prevent the landlord from proceeding with an eviction based upon the engenderment of the property or the illegal use of controlled substances. However, a certification must be filed with the court by the landlord and the debtor/tenant is given 15 days to prove the charges false or to rectify the situation.


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