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TENANTS AND BANKRUPTCY

IMPORTANT: THIS FIRM MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR CURRENT STATUS OF ANY LAW, CASE, ARTICLE OR PUBLICATION CITED HEREIN OR LINKED TO.  WARNING – SOME OF THESE REFERENCES ARE PRE-BAPCPA.

In re Kay Parker, BAP No. EC-19-1079-BSF, BK No. 17-90869, Adv. No. 18-9016 (filed 2/11/20) The debtor was involved in foreclosure of her home, and two bankruptcy cases.  The 9th Cir. BAP affirmed ruling of bankruptcy court (ED Cal.) granting creditor’s remand of unlawful detainer action to state court, after chapter 13 debtor removed it to bankruptcy court. Removal was untimely and remand was appropriate and within bankruptcy court’s discretion. Date creditor commenced unlawful detainer suit by filing and serving complaint triggered calendar for removal. Debtor’s notice of removal was nine months late. Debtor’s argument failed that her motion to quash should have been the date for triggering the deadline.

Typically, a state court cannot enter a judgment for eviction if a bankruptcy has been filed, no lift stay order obtained, or the case is not closed.  This can be fact specific.

Once the bankruptcy is filed the forcible entry and detainer hearing cannot move forward without first obtaining a lift of the automatic stayGreat Southwest Fire Ins. v. Triple” I” Ins., 727 P. 2d 336 – (Ariz: Supreme Court 1986 ) We have granted this petition for review to address one issue: whether the trial court violated the automatic stay provisions of 11 U.S.C. § 362 by entering a final judgment against defendant Triple “I” after Triple “I” had filed a petition in bankruptcy under Chapter 7 of the Bankruptcy Act. The Court of Appeals 151 Ariz. 280, 727 P.2d 333, held that 11 U.S.C. § 362 does not prevent the state court from entering judgment against a debtor. We disagree, and vacate that part of the Court of Appeals’ decision.

Although a bankruptcy court may not have authority to enjoin a state court from acting, the supremacy clause of the Constitution provides that the laws of the United States are binding on the judges in every state. To uphold a state court judgment which was entered in violation of the Bankruptcy Code violates the purpose of the *286 supremacy clause and the national policy contained in the federal act. We hold that a judgment entered in violation of the automatic stay provisions of the Bankruptcy Code is void as to the debtor in bankruptcy. The appropriate course of action for the plaintiffs is to request relief from the automatic stay in bankruptcy court. 11 U.S.C. § 362(d) (Supp. III 1985). In re KSH, Inc., 27 B.R. 690, 691 (M.D.Pa. 1982).

File a Notice of Bankruptcy in the Superior Court and a Motion to Quash the Writ of Restitution.


But, if the state court already had a hearing and entered an order for eviction the filing of bankruptcy does not stay the landlord’s right to evict the tenant.

If the client already had a trial and the judge entered a judgment of guilty, the stay applies under 362(b)(22) does not apply, unless the debtor provides notice and financial assurances under 362(l) as of the petition date (and even then, the stay only applies for 30 days unless the debtor comes current with rent under 362(l)(2).