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It does, but only temporarily. Think of bankruptcy as fundamentally that the debt holders take over, and so a short time is given for everything to be sorted ou

It does, but only temporarily. Think of bankruptcy as fundamentally that the debt holders take over, and so a short time is given for everything to be sorted out. Creditors are paid by priority based on lien rights and some policy preferences encoded into the bankruptcy code. Nobody gets to jump ahead in line. That is what the automatic stay does--it provides the pause to make sure nobody gets to jump ahead in line. As long as the stay remains in place, the landlord (or any other creditor) is forbidden from taking steps to evict a debtor. But it is possible to get relief from the stay if you can demonstrate that you would not be jumping ahead in line, and often relief from stay motions can be heard quickly. If the debtor needs the stay in order to reorganize (the theory being that it is better to have a bigger pie) then the debtor can apply for an extension, but only if it provides "adequate protection," which generally means paying according to the terms of the contract, or supplying additional collateral, or some such. Timing is important. Once you file, all legal actions against you cease, and that is a very powerful tool. Unfortunately, you can only use that tool once. (Well, if you are a human individual, you get another chance years later.) That is a very brief sketch. I haven't been a lawyer for years. You can ask a real bankruptcy lawyer for details.

2b3a51 4y ago
UK perspective: can the landlord not instruct bailiffs to take possession of the building? Change the locks &c. This is distinct from any debts owing except that the non-payment of rent provides the grounds for obtaining a possession order. I often see the bailiff notices on defunct companies here. There is a standard form of letter that is pasted onto the door. Quite Victorian.
- butlerm 4y ago
  In the US, not during the automatic stay that follows a bankruptcy petition. When filing for bankruptcy notices are sent out to all of the debtor's creditors notifying them of the bankruptcy filing and informing them that they must cease all collection activity against the party in question for the duration of the automatic stay. The reason why is that the debtor ceases to be in control of their own assets. The assets (and contracts and liabilities etc) become part of a bankruptcy estate that is administered by a trustee appointed to administer the estate in an appropriate manner, such as by liquidating assets and paying creditors in an equitable fashion. Once the automatic stay is in effect, landlords can petition the bankruptcy court for permission to retake possession of their property, and can't do much of anything until they receive it or the case is closed.

2b3a51 4y ago

UK perspective: can the landlord not instruct bailiffs to take possession of the building? Change the locks &c. This is distinct from any debts owing except that the non-payment of rent provides the grounds for obtaining a possession order. I often see the bailiff notices on defunct companies here. There is a standard form of letter that is pasted onto the door. Quite Victorian.

butlerm 4y ago
In the US, not during the automatic stay that follows a bankruptcy petition. When filing for bankruptcy notices are sent out to all of the debtor's creditors notifying them of the bankruptcy filing and informing them that they must cease all collection activity against the party in question for the duration of the automatic stay. The reason why is that the debtor ceases to be in control of their own assets. The assets (and contracts and liabilities etc) become part of a bankruptcy estate that is administered by a trustee appointed to administer the estate in an appropriate manner, such as by liquidating assets and paying creditors in an equitable fashion. Once the automatic stay is in effect, landlords can petition the bankruptcy court for permission to retake possession of their property, and can't do much of anything until they receive it or the case is closed.