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Heather Jones

If you are a tenant who wants to file or has filed for bankruptcy, then you are probably concerned about possible eviction. If you are a landlord who has a tenant who has not been paying rent and you want to provide notice of eviction, bankruptcy could stop the eviction plans in their tracks. The most crucial factor to consider is if the tenant has filed for bankruptcy yet and the state law regarding a tenant’s right to cure. Before 2005 many tenants would file for bankruptcy if they thought there was a possibility that they would be evicted, but the law has changed since then. In 2022, a landlord can still evict even though a tenant has filed for bankruptcy, but the landlord must take specific steps first. Read on to learn more about how the law affects the eviction of a tenant who has filed for bankruptcy in Illinois.  


If there has been illegal drug use in the unit, the landlord can ALWAYS evict the tenant.  


If there is illegal drug use or sale at the rented unit and the landlord has a police report reflecting that the landlord can immediately move to evict, no matter the bankruptcy status. This is prevalent landlord-tenant law in the majority of states. Any use or sale of illegal drugs will give the landlord the full right to evict any tenant or tenants staying in the unit.  


Has Bankruptcy Been Filed?


Bankruptcy is governed by federal laws, not state laws, specifically the Federal Bankruptcy Code. As a federal law, the Bankruptcy Code supersedes most state laws. The entire eviction can depend on whether or not the tenant has filed for bankruptcy and received what is called an “automatic stay.” The automatic stay is issued by the federal bankruptcy court and stops all collection activities while the bankruptcy case is proceeding through the court system. The automatic stay prohibits all foreclosures, all collection actions, and all “harassment” from creditors, which can include a landlord pursuing a claim for unpaid rent, considered a debt.  


The automatic stay comes into being immediately after the debtor files for bankruptcy and no formal order is issued. In other words, there could be an automatic stay in place, and the landlord might not even know about it immediately. If you are a landlord concerning eviction, it might be worth your time to search a website called PACER to ascertain if your tenant has filed for bankruptcy so that you know what sort of situation you will be dealing with.  For more general information on bankruptcy read our article, Illinois Bankruptcy Laws New For 2022

Man scratching head after reading past due bills


The Tenant Filed for Bankruptcy AFTER The Landlord Got an Eviction Judgment


If the landlord gets an eviction judgment before the tenant files for bankruptcy, the tenant will not be able to stop the eviction process using the automatic stay. The landlord can have the tenants removed from the property regardless of filing for bankruptcy.  


One rare example is that state law can “trump” federal law. Illinois state law does allow a tenant to “cure” if they are served with a five-day notice of eviction in the city of Chicago and Cook County, IL. A tenant can only do this one time per landlord they have. The tenant must pay all of the rent owed plus any fees associated with the eviction process to stop the eviction process. Illinois state law also protects a tenant from eviction if the landlord does not make necessary repairs to the unit. Examples will be if there’s no heat in the winter, no adequate plumbing, or dangerous electrical issues that affect the safety and habitability of the rental unit.  


The process is not as simple as it sounds; the tenant must also inform the Bankruptcy Court of what is going on. The tenant must file a certification with the Bankruptcy Court informing the court that state law allows the tenant to cure the eviction and stop it. Once the tenant has filed the certification with the Bankruptcy Court, the tenant has 30 days to deposit the money owed with the Bankruptcy Clerk, not the landlord. The tenant must also notify the landlord that the certification has been filed with the Bankruptcy Court.  



What if the tenant is not a resident of the city of Chicago or Cook County, Illinois? If the tenant is not a resident of the above-listed locations, there is no opportunity to cure that can interfere with the landlord evicting the tenant.  



If The Tenant has Filed for Bankruptcy BEFORE The Landlord Gets an Eviction Judgment


If the tenant has successfully filed for bankruptcy before the landlord gets their eviction judgment, then the landlord will be subject to the automatic stay. The automatic stay prohibits the landlord from posting a notice of eviction on the door of the unit or continuing any eviction process. There is, however, a catch here. The landlord can, if they want, petition the bankruptcy court to lift the automatic stay in regard to the eviction matter. The landlord will have to take a few extra steps, but overall, the Bankruptcy Court does not factor in the value of a rental unit when considering a debtor’s financial estate. What that means is that since the debtor (in other words, tenant) does not own or gain any income from the rental unit they are living in, then the Bankruptcy Court will not consider it when deciding whether or not to grant the bankruptcy. The Bankruptcy Court will most likely lift the stay in relation to the eviction process, allowing the landlord to proceed with the eviction.  


If you are a tenant who is suffering from financial distress and are considering filing for bankruptcy, the bankruptcy attorneys at O’Flaherty Law can assist you in assessing your situation and what the best way to meet your goals is. If you are a landlord wondering what your rights are when a tenant who has not been paying rent files for bankruptcy, our Illinois attorneys at O’Flaherty Law can also assist you in determining what your rights are and how to proceed. Feel free to give us a call, and we would be happy to help you.  

Disclaimer: The information provided on this blog is intended for general informational purposes only and should not be construed as legal advice on any subject matter. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship. Each individual's legal needs are unique, and these materials may not be applicable to your legal situation. Always seek the advice of a competent attorney with any questions you may have regarding a legal issue. Do not disregard professional legal advice or delay in seeking it because of something you have read on this blog.

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