FAQs: After Filing Bankruptcy, Creditor Info

  • Tenant/Lessee Filed For Bankruptcy, What Happens Now?

    The filing of a bankruptcy petition will generally stop (i.e., automatically stay) most actions (such as eviction proceedings or other actions for possession or damages) by a landlord against a tenant for the duration of the bankruptcy case. However, this also depends upon whether the lease was for residential property, commercial property, or personal property. For residential property it also depends upon whether or not an unlawful detainer proceeding was commenced or completed in Superior Court before the bankruptcy case was filed.

    A landlord may file a Motion for Relief from the Automatic Stay to reclaim the premises. If the motion is granted by the bankruptcy judge, the Automatic Stay will either be lifted or altered, thereby allowing the landlord to continue with a proceeding or action against the tenant, but only limited to recovery of possession of the premises.

    As this is a complex area which has been affected by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, it is recommended that legal advice be obtained from a bankruptcy attorney.

    See Also:
    Automatic Stay, What Is It And Does It Protect A Debtor From All Creditors?
    Relief From The Automatic Stay, How Do Creditors File This?