By: Transactional Department
No matter what the lease says, the mere filing of a bankruptcy by a tenant does not terminate the lease or entitle a landlord to evict the tenant. That being said, if a residential tenant files bankruptcy they are always required to continue paying rent. If they stop paying rent the landlord usually needs to file a motion in bankruptcy court to be allowed to evict the tenant. However, the 2005 changes to the bankruptcy code created an exception to when the automatic stay is imposed for some residential lease matters. If the landlord has received a judgment for possession before the tenant filed bankruptcy, then the automatic stay may not apply and the landlord may be able to continue the eviction without leave of the bankruptcy court. In some instances the tenant will have the ability to file a certification and deposit with the bankruptcy court, which if done timely and properly, can impose the automatic stay for a period of 30 days. Within those 30 days the Debtor would be required to pay all delinquent rent to maintain the automatic stay and prevent eviction. However, if the judgment for eviction is based solely on the expiration of the tenant
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