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Evictions During Bankruptcy Under California Law

kconnors from morguefile.com“Eviction” is the common term for the process by which a landlord has a tenant removed from an apartment or other leased property for violation of a lease contract, such as non-payment of rent. The word may also be used to describe proceedings brought against people who have lost their home to foreclosure but have not vacated the premises. People who are experiencing the sort of financial distress that leads to a bankruptcy filing may also find themselves facing an eviction action by a landlord or bank. In some cases, the automatic stay that takes effect in a bankruptcy case offers protection from eviction, although such protection is likely to be temporary.

A tenant may breach a lease agreement by failing to pay rent, damaging the property, or violating other terms, such as noise or pet policies. In order to evict a tenant, a landlord must provide the tenant with a notice to pay overdue rent, cure other breaches of the lease, or vacate the premises within three days. If the tenant does not comply, the landlord must file a court action for unlawful detainer. The tenant has five days to respond, after which the landlord may obtain a default judgment. If the tenant disputes the unlawful detainer, the court may conduct a trial in which the landlord must prove the grounds for eviction. In a foreclosure case, the trustee or purchaser of the foreclosed property may bring an action for unlawful detainer against a person who does not vacate the premises.

If a judgment has not been entered against a tenant in an unlawful detainer case when a tenant files for bankruptcy, or if the landlord has not yet filed for unlawful detainer, the automatic stay generally prevents further action without the bankruptcy court’s permission. A landlord can ask the court to lift the automatic stay, and courts are often inclined to grant these requests, particularly in unlawful detainer cases arising from foreclosures. Because unlawful detainer cases move through the court system quickly, they often conclude before the bankruptcy court can hear a debtor’s challenge of an order lifting the stay, resulting in a dismissal of the appeal as moot or frivolous. See In re Baghdasarian, No. CC-11-1568-KiDH, memo. (B.A.P. 9th Cir., Dec. 14, 2012); McKinney v. Kondaur Capital Corp., Nos. 11-60062, 10-1393, memo. (9th Cir., Jun. 24, 2013); Coleman v. Williams, et al, No. 13-10165, per curiam (5th Cir., Aug. 13, 2013).

Landlords also have means of circumventing the automatic stay if they certify to the court that the debtor/tenant poses a threat to the property. If the landlord files a certification with the bankruptcy court stating that the tenant has used or allowed the use of illegal drugs on the leased property, or has otherwise endangered the property, the court will lift the automatic stay and allow an unlawful detainer action fifteen days after the landlord’s filing date. 11 U.S.C. § 362(b)(23), (m)(1).

Since 1997, bankruptcy attorney Devin Sawdayi has represented clients in Los Angeles who have found themselves without sufficient income to service their debts. If needed, we can help client’s create plans that enable them to re-pay certain secured and priority debts on a manageable schedule in Chapter 13 cases, and obtain a final discharge of their remaining dischargeable debts. To schedule a free and confidential consultation to see how we may help you, please contact us today online or at (310) 475-9399.

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Can A Bankruptcy Lead to Loss of a Job? Los Angeles Bankruptcy Lawyer Blawg, September 2, 2013

The Effects of Bankruptcy on Your Credit Score, Los Angeles Bankruptcy Lawyer Blawg, August 14, 2013

Deed from Foreclosure Sale Valid Despite Being Recorded During the Automatic Stay in Borrower’s Bankruptcy Case, Court Rules, Los Angeles Bankruptcy Lawyer Blawg, July 18, 2013

Photo credit: kconnors from morguefile.com.