Bankruptcy Blog

Filing for Bankruptcy to Stop Eviction in New York

When a tenant files for bankruptcy in New York, an automatic stay is created. An automatic stay is a mandatory injunction that arises without the need for a hearing or court order, and it operates to protect the debtor and his or her property at the onset of a bankruptcy case. An additional function of an automatic stay is to prevent eviction until the bankruptcy court has had an opportunity to assess the merits of the case. However, there are a number of circumstances in which a bankruptcy automatic stay will not prevent an eviction, including:

  1. The landlord obtained a judgment before bankruptcy was filed – If a landlord obtains a judgment of possession before bankruptcy is filed by his or her tenant, then an automatic stay will not prevent eviction. However, under New York law, a tenant may prevent eviction under these circumstances by declaring a legal right to cure the default on the bankruptcy petition, making a deposit with the bankruptcy court clerk for the amount of rent that will be owed to the landlord within 30 days of the filing, and paying all outstanding rent 30 days thereafter.
  2. Property endangerment or illegal substance use by the tenant – An eviction action will not be stayed by a bankruptcy filing if a tenant has endangered the property or engaged in the illegal use of controlled substances on the property. In order for a landlord to evict a tenant under these circumstances, he or she must file and serve on the tenant a certification demonstrating that:a)The landlord has filed an eviction action against the tenant based on the tenant’s endangerment of or illegal drug use on the property; orb)The tenant has endangered the property or engaged in illegal drug use on the property during the 30-day period prior to the certification.
  3. The automatic stay is lifted by the court upon request of the landlord – Landlords are free to request that the court lift an automatic stay to begin or continue an eviction for any reason. In fact, courts are often willing to lift automatic stays at the request of landlords, because the majority of evictions have no effect on the bankruptcy estate. In other words, a tenancy can’t be converted into funds by a trustee to pay back a tenant’s creditors. Generally speaking, bankruptcy courts tend to favor the property rights of landlords over the debt issues of tenants.

New York Legal Representation

If you are considering filing for bankruptcy in New York, please contact an attorney to discuss your situation. An experienced New York Chapter 7 or Chapter 13 bankruptcy attorney will keep you apprised of your rights while ensuring that you understand all of your debt relief options. Please contact us for a free consultation.

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