Law Firm Information: Bankruptcy Law – New Jersey – 732-866-6655 Website: www.wwwlawofficeofedwardhanratty.com

 

 

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Photograph Description Young man who received an eviction notice.

 

Meta Description: Eviction and bankruptcy in New Jersey are interrelated. Discuss your case with a bankruptcy lawyer to see if declaring bankruptcy can prevent your eviction.

Eviction And Bankruptcy In New Jersey 

Many people facing eviction for non-payment of rent do not realize that eviction and bankruptcy in New Jersey are interrelated. In some cases, filing for bankruptcy can allow you not only to come up with a payment plan with your landlord, but also to allow you to continue to live at your current rental property. Contact the Law Office of Edward Hanretty at 732-866-6655 to speak with a trusted bankruptcy attorney in New Jersey. Hundreds of thousands of people file for bankruptcy every year, and COVID-19 only exacerbated a persistent problem. You are not alone. Our firm helps clients find a way out of their debt and regain their financial freedom. 

Can Declaring Bankruptcy Prevent Eviction?

Yes, in some cases, declaring bankruptcy can help prevent your landlord from evicting you. The most important things to keep in mind are that only Chapter 13 bankruptcy can halt an eviction, not a Chapter 7 bankruptcy. Also know that you must have filed for bankruptcy before you attend your eviction hearing. This means you cannot wait until your landlord has obtained a judgment for possession against you to claim that you are bankrupt and unable to pay back your rent. Consider visiting with our legal team at Law Office of Edward Hanretty to answer your questions before you make important decisions regarding eviction or bankruptcy in order to ensure your legal rights remain protected.

Understanding Eviction and Bankruptcy in New Jersey

An eviction is when the landlord has a tenant lawfully removed from their property. In the state of New Jersey, a landlord must obtain a judgment of possession and a writ of execution prior to evicting their tenant. 

Why Can Tenants Be Evicted?

There are numerous reasons why tenants in New Jersey can be evicted. In some cases, the landlord does not need any reason at all to evict a tenant. According to N.J. Stat. § 2A:18-61.1, some of the reasons why tenants are evicted include:

 

·         Owing back rent

·         Failing to make timely payments

·         Being loud or disorderly

·         Harming the property

·         Breaching the lease

·         The lease term ends

 

When the landlord is within their rights to evict the tenant, they may file a complaint with the New Jersey Superior Court seeking a judgment of possession. The tenant is then summoned to court and must attend a hearing to defend themselves. At this point, it is often in the tenant’s best interests to discuss their case with a lawyer to see if there are any possible defenses. This is where filing for Chapter 13 bankruptcy may be able to prevent the eviction.

How Filing for Bankruptcy Affects an Eviction in New Jersey

In a Chapter 13 bankruptcy, the debtor (here, the tenant) must submit to a repayment plan for all of their outstanding debts, usually within a year or two of filing. In an eviction for failure to pay rent, the landlord is treated as one of the debtor’s creditors. When the tenant-debtor agrees to a repayment plan as part of their Chapter 13 bankruptcy, the landlord receives part of the monthly disbursement from the bankruptcy trustee. When the tenant files for bankruptcy, the court places an automatic stay on all debt collection activities, which means all creditors, including the landlord, must immediately stop trying to collect late payments, such as back rent. 

 

If you can satisfy the terms of your repayment agreement, then your New Jersey landlord cannot evict you for non-payment of rent, as long as you continue to make rental payments going forward as well. Bear in mind that bankruptcy can only stop a landlord from evicting you for non-payment of rent. The landlord may still evict you for any other lawful reason, as discussed above. 

What Happens If My Landlord Tries to Collect Rent After I Declared Bankruptcy?

If the landlord violates this automatic stay, such as by contacting you asking for late rent, they can end up owing significant fines. However, if the landlord wishes to continue to demand your back rent or proceed with the eviction after the bankruptcy is approved, they can seek a motion for relief from the bankruptcy judgment from the bankruptcy court.  

Am I Eligible for Chapter 13 Bankruptcy?

Whether a bankruptcy will help prevent an eviction depends on whether you are filing a Chapter 7 or Chapter 13 Bankruptcy. Both Chapter 7 and 13 bankruptcies place an automatic stay on all debt collection activities, but only a Chapter 13 bankruptcy will give you the option to continue living in your apartment while paying back your landlord according to the repayment schedule.

What Is the Difference Between Chapter 7 and 13 Bankruptcy?

The main difference between Chapter 7 and Chapter 13 bankruptcy is whether or not you need to pay back your debts. In a Chapter 7 bankruptcy, the debtor’s nonexempt property is completely liquidated and used to pay back creditors. With this method, many of your assets are repossessed and turned over to a trustee to pay back your creditors. You do not have to continue to pay back your creditors after this process is complete. Not everyone is eligible for Chapter 7 bankruptcy; it is limited to people who do not meet a particular means test. In other words, Chapter 7 is for people who do not earn enough to pay back their debts.

 

On the other hand, Chapter 13 bankruptcy does require the debtor to pay back their debts according to a repayment plan. Chapter 13 is appropriate for individuals who have enough disposable income to pay back their creditors in monthly installments. 

How Do I File for Bankruptcy?

Consider discussing your case with an experienced New Jersey bankruptcy lawyer at Law Office of Edward Hanratty to determine if you are eligible for bankruptcy and to have your questions answered. To begin the process, you must file a petition with the court and submit numerous documents about your finances, including inventories of your assets, liabilities, income, debts, contracts, leases, and any other financial affairs. This can be a time-consuming and expensive process, so consider consulting with an experienced attorney to make sure your legal rights remain protected.

Consider Visiting with an Experienced New Jersey Bankruptcy Attorney  

If you are one of the many New Jersey renters who are facing eviction for failure to pay rent, you are not alone. When debts pile up, it can seem insurmountable to pay them back. If you feel overwhelmed, consider visiting with an experienced attorney who knows how bankruptcy and eviction in New Jersey go hand in hand. We work with each of our clients to decide which path is right for them and help them on the road to financial recovery. Call the Law Office of Edward Hanratty at 732-866-6655 to learn more about our services and find out if filing bankruptcy is right for you.