Sep 27

On August 25th we evicted a tenant.  The court stayed the writ (a court order for the Sheriff to remove the  tenant) until August 28th.  On September  6th we turn the eviction into the Sheriff, who performs the move on September 14th.

The day following the move we receive notice that the tenant has filed bankruptcy on the 7th – the day after we turned in  the writ.  This was followed the next day by a notice that she is demanding a hearing in Federal Court, seeking sanctions against us alleging we violated the  automatic stay granted by bankruptcy by not stopping the move.

So what is the law?  Well if you have obtained the writ prior to the tenant filing bankruptcy, there is very little a tenant can do to stop the move.  The code covering this is Title 11 of the United States Code at Sections 362(b)(22), 362(b)(23), 362(l) and 362(m)

A good overview of this is on the Bankruptcy Network Web site and on Tristan Pettit site

This became the law in 2005 as the  Bankruptcy Abuse Prevention Consumer Protection Act, so one would think the Bankruptcy Court would be well aware of this provision.  The judge that heard our case was not, and initially believed we had violated their law.  Only after our attorney pionted out the section of  the code and was supported by the Chapter 13 Trustee, did  the Judge back off of her initial opinion  that not stoping the move was a violation of the automatic stay.

Note: Note the above only applies if you obtained the court order allowing you to have the tenant moved by the Sheriff PRIOR to the tenant’s filing.  If the eviction court case is still  in process when you get notice that the tenant filed bankruptcy  you must stop the eviction or face serious penalties.  If your tenant files bankruptcy it  sounds like a good point for even the most adamant do it yourself legal experts to hire an attorney.

There is a similar procedure if the tenant is selling drugs or damaging the place.

Another way a tenant would not be eligible for an automatic stay is by availing themselves of bankruptcy protection too often.  The judge on her own accord pointed out that as this was the tenant’s third bankruptcy filing in a year, she had voluntarily dismissed the other two.  Therefore could have been no automatic stays.

It should be noted that the tenant did not call us nor had we received notice of the bankruptcy prior to the move or we would have mistakenly cancelled the Sheriff move due to our prior ignorance of this part of  the bankruptcy law. The next tenant who tries this will have her to thank for our education… 😉

An extreme thanks to Attorney Heiner Giese who knew knew this provision of the law and, while unable to represent us due to scheduling a conflict, was able to provide this information for Attorney Peters who represented us at the hearing.

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