Automatic Stay

• Legal proceedings and collection attempts cannot continue once a bankruptcy case is filed. When a tenant is late with his rent payments and has received notification that the landlord will begin eviction proceedings, the bankruptcy filing stops any actions that the landlord is trying to pursue. If the landlord received a court judgment authorizing the eviction before the bankruptcy case started, the landlord ultimately may still be able to evict the tenant, depending on the laws in the state of residence.
  
  

Assuming the Rental Lease

• The debtor must assume the rental lease for it to remain in effect during the bankruptcy. Assumption occurs by providing written notification to the landlord that the lease will be assumed and stating the intent to assume the lease in the bankruptcy petition. The debtor must show that he is capable of fulfilling the terms of the rental lease. According to section 365 of the Bankruptcy Code, the tenant must show that he makes enough income to cover the rent payments in the future. The tenant must also promptly pay any delinquent rent or create a payment plan that is acceptable to the landlord and the court.
  
  

Abide by Rental Lease

• When the debtor assumes the rental lease in the bankruptcy, he must comply with all rental lease terms. Any provisions regarding maintenance of the premises, noise control, prompt notification of repairs that need to be performed or other aspects of the rental agreement remain legally binding. Any conflicts or problems with aspects of the rental lease should be addressed and reconciled prior to the bankruptcy court approving the assumption of the lease.
  
  

Motion for Relief from Stay

• If the debtor does not continue paying rent or if other terms of the rental lease have been violated, the landlord can file a motion for relief from stay with the bankruptcy court. The motion may provide information regarding breaches of the lease terms and request permission to pursue eviction claims through the state court. If the bankruptcy court grants the motion, the landlord is no longer inhibited by the automatic stay and can begin eviction proceedings.