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When
a person files bankruptcy, a provision of the bankruptcy law called the
automatic stay goes into effect immediately. The automatic stay means that
no creditor may take any action to attempt to collect further funds from
the debtor or to dispossess the debtor from any property of the estate.
Even though the debtor is just renting an apartment, because it is the debtor's
residence, it qualifies as property of the estate. This means that as soon
as the landlord or attorney finds out about the bankruptcy, we must stop
the eviction immediately and obtain an order from the bankruptcy court granting
us relief from the automatic stay to continue the eviction process. Unfortunately,
this could mean that the sheriff will stop in the middle of a physical eviction
if the tenant shows up with a bankruptcy filing notice. Once we have obtained
relief from the automatic stay, we must then continue in state court with
the eviction.
The major problem when a tenant files bankruptcy is the delay that it will
cause. Bankruptcy judges schedule their hearings only twice a month (once
a month in Snohomish and Kitsap County). In addition, bankruptcy rules require
24 days prior notice of a hearing to the debtor. For the most part, we can
shorten that 24-day time down to about 7 to 10 days.
So, as a practical matter, if the tenant files bankruptcy, you should plan
on a delay of between three to six weeks in the eviction.
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