During the COVID-19 pandemic, the federal CARES Act and the CDC currently protect renters from eviction. That moratorium is coming to an end, but some renters may find they face eviction due to job or life changes during or because of the pandemic.
In a recent survey conducted by the U.S. Census Bureau’s Household Pulse, 3.2 million people expect to face eviction in the months following the end of the eviction moratorium. They are wondering what will happen and what their options are. Many people do not think about bankruptcy as a possibility, but it can help.
In Alabama, a landlord is required to provide a renter with a seven-day notice before moving forward with an eviction process. A landlord can take several different routes with the eviction process, depending on the tenant’s situation. Should the tenant correct a violation or pay owed money, the landlord will not move forward with an eviction.
If the renter doesn’t come in line with the terms of their lease during those seven days, the landlord can then move forward with the eviction process. The landlord will file a lawsuit against the tenant, and the tenant will have ten days to move out of the apartment. If the tenant is still on site after those ten days, an additional notice will be served, and court proceedings may begin. Depending on the tenant’s exact situation, the eviction process can take just a few weeks or last for several months.
So, how does bankruptcy help? It depends on which kind of bankruptcy you are filing. You can file a Chapter 7 bankruptcy and it will usually discharge the liability on the rental contract so that you can get out of the rental unit and get rid of any debts you might owe. In addition to this, the bankruptcy filing also creates something called an automatic stay of protection that can prevent the landlord from evicting you for a few months. That can give you time to stay there, get out, find somewhere else to live, while also getting rid of any debts you might owe from it.
Chapter 7 bankruptcy might not allow you to stay in the rental unit, but Chapter 13 can sometimes help with this. Chapter 13 is a multi-year payment plan and you can essentially take the rental payments you are behind and spread them out over five years and pay them off over time while continuing to pay your current payments. This can let you stay in the rental unit while getting caught up on the back payments over time.
To sum up, a Chapter 7 can help you if you get out of the rental unit and Chapter 13 can help if you want to stay there. Either way, talking to a bankruptcy attorney in Tuscaloosa or wherever you reside may be helpful in dealing with your troublesome lease issues.