The Effect of Filing Bankruptcy On Evictions and Foreclosures: Updated 2020

The Supreme Court of Georgia declared a “judicial emergency” on March 14, 2020, and
ordered a suspension of jury trials because of health concerns over the spread of the virus. The
judicial emergency also affected many debt collection procedures, including evictions and
foreclosures. The initial Order only lasted about a month, but it has been extended several times
since then. As of the date of this blog, it has most recently been extended to Tuesday, August 11,
2020, at 11:59 p.m. The Order is clear that safety is an overriding concern, so other extensions
are certainly possible.

However, these Orders don’t change the law, and ultimately, they will not wipe out debt,
or prevent landlords, banks, mortgage companies, and other creditors from exercising their
traditional debt collection powers in the event of default. The emergency just delays the exercise
of those rights.

So how can filing bankruptcy stop an eviction or foreclosure? With regard to rent, if you
default on your rent, the landlord’s remedy is to declare the lease to be terminated, and to recover
possession of the property by filing a “Dispossessory” in state court. This is an accelerated
procedure that the renter will usually lose– unless he or she brings the rent current, or unless
some consensual agreement is reached with the landlord. A Dispossessory normally only requires
seven days to accomplish. If it is granted, the landlord can put your furniture and possessions out
on the street under the protection of the police over your objections.

If a state court has granted a Dispossessory before a bankruptcy is filed, neither Chapter 7
nor Chapter 13 will not stop an eviction, even though Chapter 7 will wipe out any debt that is
still owed as the result of the pre-bankruptcy default. A Chapter 13 is different. It is a debt
consolidation plan, and can actually stop an eviction– but the “plan” must provide for monthly
payments to the landlord that are enough to “cure” the default during the remaining part of the
lease. Thus, if you have six months left on your lease, and if you are $600 behind, your plan
would need to pay at least $100 per month to the landlord catch up that default within the
remaining lease period as you continue to make regular rent payments. Curing a rent arrearage is
usually a short term fix in Chapter 13, because the bankruptcy court will not force the landlord to
rent to you beyond the term of the original lease, even though the plan may last much longer. Of
course, the landlord could agree to another lease period voluntarily. It is very helpful to make
landlords happy, because they have real power in this situation.

As for foreclosures, a Chapter 7 will delay, but not prevent them. However, if you have
enough equity in your property, you may be able to protect tens of thousands of dollars that
would otherwise be lost in foreclosure. Chapter 13 is the tool used to stop foreclosures
permanently, and allow you to cure mortgage arrearages over a period of years while you
continue to make regular monthly mortgage payments. Chapter 13 can reduce what you pay on
car notes or unsecured debt, and make it affordable for you to cure mortgage defaults over time.
Chapters 7 and 13 are different tools that require planning and discussions with a bankruptcy
lawyer to get a clear idea of what can be done for you in your unique situation.

Call us for a free consultation at 770-683-3303, and stay safe.


Everyone is affected by this disease and by this economy, but it affects some
people more than others. All people are not “equal” in the way life treats them, and
luck isn’t equally distributed. If you have the prospect of drowning in debt, you
may need help in choosing the best path forward. We’ve been practicing
bankruptcy law locally since 1990. Consultations with an experienced attorney are
free. We can work through your situation with you, whether it seems simple or
overwhelmingly complex.

We’re in a changing world, and it is not changing for the better for everyone.
Debt strategies need to look to the future. Your future. Have you lost income
because of furlough, job loss, divorce, or medical expense? Are you being sued,
threatened, or harassed? Do you expect things to turn around on their own soon?
Call us so we can listen to you describe your situation in your words.

Chapter 7 and Chapter 13’s are different tools that are suitable to meet
different needs in different situations. You may want to wipe the slate clean, or you
might want to stop a garnishment, repossession, or foreclosure and resume paying
your debt under the protection of the court. We know these tools, and how to
maximize the benefits to you under the law. The key is to fit your needs to what
those tools can do. We know the lay of the land.

If you want the best service for the best price with flexible payment arrangements,
call us now with no obligation at 770-683-3303. You are not alone, and we are here
to help.