In 2005, however, subsection (b) of Section 362 of the Bankruptcy Code was added and now provides the following """"exception"""" to the automatic stay for a judgment for possession """"obtained before the date of the bankruptcy petition"""":
""""(b) The filing of a petition pursuant to sections 301, 302, or 303 of this title or an application pursuant to section 5(a)(3) of the Securities Investor Protection Act of 1970 does not operate as a stay --...""
(22) subject to subsection (l), under subsection (a)(3), of the continuation of any eviction, unlawful detainer action, or similar proceeding by a lessor against a debtor involving residential property in which the debtor resides as a tenant under a lease or rental agreement and with respect to which the lessor has obtained a judgment for possession of such property against the debtor;""""
If the landlord has not obtained a possession judgment against the debtor prior to the bankruptcy filing, the automatic stay applies and halts the eviction.
Nevertheless, if the landlord has already obtained a judgment for possession against the debtor prior to the bankruptcy filing, the automatic stay does not stop the eviction unless the debtor completes the section on Page 2 of the Voluntary Petition titled """"Certification by a Debtor Who Resides as a Tenant of Residential Property"""", makes the required certifications in that section, and deposits with the bankruptcy court any rent that would become due within 30 days after the bankruptcy filing. The debtor must then remedy the entire rent delinquency that led to the judgment of possession within 30 days.
Filing bankruptcy prior to entry of a judgment for possession against the debtor provides the debtor with two very significant benefits: (1) the automatic stay stops the eviction without the need to deposit rent with the bankruptcy court; and (2) an unexpired residential lease that has been terminated under state law due to non-payment of rent can be """"cured"""" and """"assumed"""" in a chapter 13 bankruptcy proceeding; the past due rent arrears can be paid over time in a chap
Regarding the reinstatement of a terminated residential lease, be careful to review the applicable bankruptcy case law in your jurisdiction. Be aware that the Bankruptcy Code regards non-residential lease defaults differently than residential lease defaults.""
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