Bankruptcy Cloud Reemerges as the Eviction Moratorium Ends
What cloud? I’m talking about that metaphorical cloud of anxiety that forms when you know something is looming over your head. During the entire pandemic, Congress made it impossible for someone to be evicted from their home. Their reasons were sound and just. It made sense that many people wouldn’t be able to pay their rent or pay their mortgages due to loss of jobs. However, now the US Supreme Court decided to end the national moratorium. A moratorium is a law that prevents some type of activity, which in this case is preventing eviction. What’s strange about this is that only $5.1 billion of $46.5 billion in aid has been disbursed, so there should be more people who could receive more financial help.
After suffering and surviving through 18 months of a global pandemic, not everyone may be quite ready to resume rent and mortgage payments. Assuming that you had been making timely payments prior to the moratorium, you won’t be evicted if you miss your first month’s payment. It normally takes several missed payments to make it to court and then another hearing for the eviction. So, if you were up-to-date on your payments prior to the moratorium, you’d be able to live in your home for five to eight more months. If you were behind on your payments prior to the moratorium, it is possible that you may face quicker action. I’ve heard that some law firms have had to pre-draft lawsuits to file for default and for eviction at the request of the lenders. Those cases would be in court within a couple of months.
Whatever living situation you are in, there are steps you can take to protect your home. The key is to get ahead of what is likely to come. If you file for bankruptcy, there is an automatic stay on all legal proceedings. This means that by filing for bankruptcy, you won’t be evicted and you can control what happens to your home under mostly your own terms. If you don’t file, it’s possible that you will have default judgments and liens on your property or even have your wages and bank accounts garnished.
If you’re worried about what might happen when the eviction moratorium ends, then you need to speak with someone who can help you, and a bankruptcy attorney, such as myself, is one of those people. I don’t charge you to talk; I’m happy to see if I can help. I look forward to hearing from you or any of your friends and family that might need some sound legal advice on how to put the best step forward.