Can Bankruptcy Remove Evictions in Michigan?

Bankruptcy cannot remove past evictions from your record in Michigan, but it can temporarily stop an ongoing eviction through the automatic stay. When you file for bankruptcy, the automatic stay prevents landlords from continuing eviction proceedings, but only if they haven’t already obtained a court judgment.

Chapter 13 bankruptcy may allow you to catch up on overdue rent and remain in your home, while Chapter 7 bankruptcy typically provides temporary relief from eviction but won’t permanently stop it unless you resolve outstanding rent.

Facing eviction is a stressful experience, especially when financial hardships and the bankruptcy process compound the issue. For Michigan residents struggling with eviction due to financial problems, bankruptcy may offer a lifeline.

A Michigan bankruptcy lawyer can explain the connection between bankruptcy and evictions, in particular how Chapter 7 and Chapter 13 bankruptcy can help or hinder tenants facing eviction. Plus, some background is useful.

The Connection Between Bankruptcy and Evictions: Will Bankruptcy Clear Prior Home Evictions?

When considering bankruptcy as a solution to eviction, it’s essential to understand that bankruptcy does not automatically erase a prior eviction from your record. In Michigan, eviction records are typically filed as part of public court records, and filing for bankruptcy does not remove those records. However, bankruptcy can play a significant role in preventing or halting an eviction in progress, depending on the circumstances and type of bankruptcy filed.

If you have already been evicted and the eviction has been finalized, bankruptcy cannot remove the eviction from your rental history. However, if you’re in the middle of an eviction proceeding, certain bankruptcy filings can stop the process temporarily, giving you time to reorganize your finances.

Chapter 7 Bankruptcy, The Automatic Stay, and Eviction

Chapter 7 bankruptcy is often referred to as “liquidation bankruptcy” because it involves selling off non-exempt assets to pay creditors. One of the immediate benefits of filing for Chapter 7 bankruptcy in Michigan is the automatic stay. The automatic stay in bankruptcy is a legal provision that halts most collection actions, including eviction proceedings, as soon as the bankruptcy is filed.

However, the automatic stay has limitations when it comes to eviction. If your landlord has already obtained a judgment for possession before you file for Chapter 7 bankruptcy, the eviction process will not be stopped. The automatic stay can only pause an eviction if it is filed before the landlord secures a court judgment for eviction. This means that Chapter 7 bankruptcy may only provide temporary relief if you’re already facing eviction proceedings.

In cases where the landlord claims that the tenant has engaged in illegal activities or damaged the property, the landlord may be able to file a motion to lift the automatic stay, allowing the eviction to proceed despite the bankruptcy filing.

Chapter 13 Bankruptcy and Eviction

Chapter 13 bankruptcy differs from Chapter 7 in that it focuses on reorganization rather than liquidation. When you file for Chapter 13 bankruptcy in Michigan, you’re required to propose a repayment plan to your creditors. This plan typically lasts three to five years and allows you to catch up on past-due debts, including overdue rent payments under your lease agreement.

One of the benefits of Chapter 13 bankruptcy is that it may allow you to stay in your home if you’re behind on rent. The automatic stay also applies in Chapter 13 filings, temporarily halting eviction proceedings while you work out a repayment plan. In some cases, tenants can use Chapter 13 bankruptcy to cure arrearages (past-due rent) and remain in their rental property as long as they continue to make future payments as part of their Chapter 13 repayment plan.

However, as with Chapter 7 bankruptcy, the automatic stay may not stop an eviction if the landlord has already obtained a judgment for possession. Additionally, you will still be responsible to pay rent moving forward while adhering to the terms of your Chapter 13 repayment plan.

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How a Tenant Bankruptcy Affects a Landlord’s Right to Evict

When a tenant files for bankruptcy in Michigan, landlords face limitations on their ability to evict tenants due to the automatic stay. While this stay can provide tenants with temporary relief, it’s important to understand how it affects a landlord’s rights. Landlords in Michigan can petition the court to lift the automatic stay, especially if the tenant has already defaulted on their rent or if there are other compelling reasons, such as property damage or illegal activities.

If a tenant files for bankruptcy before an eviction judgment is obtained, the landlord must halt the eviction process until the court decides whether to lift the stay. Any pending eviction ceases.

However, if the landlord has already received an eviction judgment, the automatic stay does not apply, and the eviction can proceed as scheduled. The landlord can proceed with an eviction lawsuit and other legal measures.

In cases where a tenant uses bankruptcy to temporarily halt an eviction, it’s essential to act quickly and work with a bankruptcy attorney to explore other solutions. While bankruptcy may provide temporary relief after an eviction notice, it does not erase rent obligations. It also will not give tenants the right to remain in the property indefinitely without addressing overdue rent.

Can Chapter 7 Bankruptcy Stop an Eviction?

Chapter 7 bankruptcy can potentially stop an eviction, but only under specific circumstances. If your landlord has not yet obtained an eviction judgment, the automatic stay triggered by a Chapter 7 filing may provide temporary relief from eviction proceedings. This can give tenants some breathing room to figure out their next steps, whether it’s negotiating with their landlord or seeking other housing options.

However, if the landlord has already won an eviction judgment or if the eviction is based on illegal activities or property damage, the automatic stay may be lifted, allowing the eviction to proceed. It’s essential to understand that even if the automatic stay applies, it is only a temporary measure. Tenants will still need to address any unpaid rent or work out a solution with their landlord to remain in the property long-term.

How Bankruptcy Can Help You if You’re Being Evicted

Bankruptcy can be a valuable tool for Michigan tenants facing eviction due to financial hardships. Whether you’re considering Chapter 7 or Chapter 13, bankruptcy can provide temporary relief from eviction while you work to reorganize your finances.

For tenants behind on rent, Chapter 13 bankruptcy may offer the best chance of staying in your home, as it allows you to create a repayment plan to catch up on overdue rent while preventing further eviction proceedings.

Even if you’re facing eviction, bankruptcy can give you time to assess your options, negotiate with your landlord, and develop a plan to get back on your feet financially. However, it’s crucial to act quickly and work with a bankruptcy attorney to ensure that your bankruptcy filing provides the most protection possible.

Discuss Evictions with a Skilled Bankruptcy Attorney

If you’re facing eviction and considering bankruptcy as an option, contact a Michigan bankruptcy attorney to explore your options. They can help guide you through the process and determine the best course of action to address both eviction and your financial challenges.

Struggling with eviction and considering bankruptcy? Contact Kostopoulos Bankruptcy Law today for a free consultation and learn how we can help you protect your home and financial future. Call 877-WOW-RITA to speak with an experienced attorney now!

Answers to FAQs About Bankruptcy and Evictions in Michigan

Can filing bankruptcy remove an eviction from my record in Michigan?

No, filing for bankruptcy does not remove an eviction from your record or credit report in Michigan. Evictions are part of public court records, and bankruptcy cannot erase them. However, bankruptcy may provide temporary relief from ongoing eviction proceedings.

Will the automatic stay stop my eviction?

The automatic stay triggered by bankruptcy can temporarily halt eviction proceedings, but this only applies if your landlord has not yet obtained an eviction judgment. If the eviction judgment has already been issued, the automatic stay will not stop the eviction.

Can Chapter 13 bankruptcy help me avoid eviction?

Yes, Chapter 13 bankruptcy can help tenants avoid eviction by allowing them to catch up on overdue rent through a repayment plan. The automatic stay applies to Chapter 13, temporarily halting eviction proceedings while the tenant works on a financial plan.

Can I still be evicted if I file bankruptcy?

Yes, you can still be evicted if you file for bankruptcy, especially if your landlord has already obtained an eviction judgment or if your bankruptcy filing does not resolve overdue rent or other issues.

Let Us Help with Your Bankruptcy Filing in Michigan

Worried about eviction in Michigan? Bankruptcy may be the solution you need. Reach out to Kostopoulos Bankruptcy Law for a free, no-obligation consultation to explore your options. You can call 877-WOW-RITA today to speak with a skilled bankruptcy lawyer. Take the first step toward regaining control of your finances!