TENANT FILED BANKRUPTCY! CAN YOU STILL COLLECT RENT OR EVICT? Few notices unsettle a landlord like a tenant’s bankruptcy filing. The moment a tenant files bankruptcy, a federal shield called the “automatic stay” halts most collection and eviction activity. But the stay is neither permanent nor absolute. With the right steps, landlords can often resume an eviction and continue to be paid. THE “AUTOMATIC STAY”: WHAT LANDLORDS NEED TO KNOW
The instant a tenant files a petition, Bankruptcy Code Section 362 imposes a stay that applies “to all entities.” The stay stops the commencement or continuation of any action against the tenant, any act to obtain or exercise control over property of the bankruptcy estate, and any act to collect a debt that arose before the filing.
eviction lawsuit, enforce a possession judgment or warrant, or chase unpaid back rent once the petition is filed. The stay takes effect automatically. No court order is required and violating it can expose a landlord to sanctions. When you learn of a filing, stop and reassess before taking any further action.
In simpler terms, landlords cannot continue an
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