How Does Filing Bankruptcy Affect Your Eviction Case?

I would like to initially point out that I am NOT a bankruptcy attorney and this post is only related to my observations and understanding about how a bankruptcy case will affect an eviction matter. If you are considering filing bankruptcy, you should absolutely speak to a bankruptcy attorney about that. If you are thinking about filing bankruptcy as a potential strategy in eviction court, there are some things you should know:

1. Filing bankruptcy will not stop the eviction action. Homeowners who file bankruptcy may have what is called a “homestead exemption,” which may have the effect of saving your primary dwelling from creditor attack. This does not apply in rental situations because you do not own your rental. If you file bankruptcy and name your landlord as a creditor, the automatic stay that is placed on all creditors by the bankruptcy court will stall that eviction proceeding until that stay is lifted in federal court. Experienced practitioners know how to do this quickly and the delay should only take about two weeks.

2. Filing bankruptcy may keep you from achieving a favorable settlement in eviction court. Once the bankruptcy stay is in place in federal court, all creditor proceedings are considered void ab initio (which, in layman’s terms, means void from the beginning) until the stay is lifted. That means that, while no trial or judgment can happen until the stay is lifted, no settlements or agreements can happen either. This can obviously be a bad thing. If you file bankruptcy and thereby force your landlord to hire an attorney to lift the bankruptcy stay in federal court, they are a whole lot grumpier with you when it comes to discussing a resolution short of trial.

3. Filing bankruptcy will not affect whether your eviction is a public record. Federal and state proceedings are separate from one another. If your concern is having an eviction on your background or credit history, filing bankruptcy will not do anything to solve that.

Once again, there are quite legitimate reasons for filing bankruptcy. If you are considering that path, you should absolutely consult with an attorney that specializes in that practice.

Recent Changes in the Law for Eviction Defendants in Illinois

Recent Illinois Appellate Court decision are likely going to have a significant impact on the rights eviction court defendants have in asserting counterclaims against their landlords and having their case heard before a jury. The two cases I’m going to discuss are:

Milton v Therra (http://www.illinoiscourts.gov/Opinions/AppellateCourt/2018/1stDistrict/1171392.pdf)

and

Goodwin v Matthews (https://law.justia.com/cases/illinois/court-of-appeals-first-appellate-district/2018/1-17-2141.html)

Milton v Therra

This case arose out of a commercial eviction of a hairdressing studio. The landlord likely performed several illegal lockouts during the course of the litigation. Because of this, the Defendants were awarded damages for a counterclaim for lost profits and the court held the landlord in contempt. Half of the Court’s opinion is about civil contempt proceedings and what procedure is appropriate in that circumstance but the other half is about monetary counterclaims and whether Defendants in eviction proceedings can bring them. Evictions are a limited forum and very few topics are appropriate to raise there outside of questions of possession and back rent owed. The court lists the relevant claims as:

1. claims asserting a paramount right of possession (saying the landlord does not have a greater right to the property, which is rarely argued)

2. claims denying the breach of the agreement vesting possession in the plaintiff (saying that there is no back rent owed or a present lease violation; this is where claims about habitability of the property would be)

3. claims challenging the validity or enforceability of the agreement on which the plaintiff bases the right to possession (saying the lease itself is not legally binding, also pretty rare)

4. claims questioning the plaintiff’s motivation for bringing the action. (this is where a retaliatory claim, which is commonly argued, would fit)

The court held that the Defendants could not be awarded damages based on a monetary counterclaim for lost profits in their eviction proceeding because such a claim is outside the scope of an eviction court’s purview. The claim would need to be brought is a separate proceeding. The court goes on to say the monetary damages for counterclaims are general disallowed in an eviction proceeding. Because this was a commercial eviction, the Court does not address any municipal residential rental ordinances which allow for monetary damages in retaliation and habitability claims, such as the Chicago Residential Landlord Tenant Ordinance (CRLTO). Because such ordinances are not specifically addressed, it is arguable that those counterclaims are still valid. Be prepared for a judge disagreeing with you though, as many are reading Milton as disallowing all monetary counterclaims, period.

Goodwin v Matthews

This case covers a lot of topics, but the one I will discuss here is jury demands and when a court in an eviction proceeding will consider your right to a jury trial waived. Most court proceedings that allow for a jury trial will consider that right waived if the jury demand is not filed close to the beginning of the case. This case asserts what has long been the standard in eviction proceedings: your jury demand is due when you appearance is “first required.” What that means has been open to some interpretation. In my opinion, these are the two scenarios where this ruling matters to defendants in eviction court:

1. If you come to court when you are served and ask for a continuance to get an attorney, it is my opinion that fling a jury demand on or before the next court date is still timely. That is the fact pattern of Pecoraro v. Kesner, 578 N.E.2d 53 (1st Dist. 1991), which I believe is still good law. Be prepared to argue this before the judge because there is some disagreement on this point.

2. If you miss a court date you are served for and file a motion to vacate afterwards, your jury demand will be considered waived. That was not frequently argued before this decision. It will be now. Do not miss your court date!

What to Do

If you are a defendant served for an eviction proceeding, be sure to consult with an attorney before you go to court about your rights and what to expect. These proceedings are fast by statute and it is very important that you don’t compromise your rights or fail to understand what your rights are. Good luck!

I'm being evicted! How does this work?

Despite the local folklore about the profile and personality of defendants in eviction proceedings, most people are not repeat players in the eviction process and go through it only once in their lifetime. For anyone new to the process of eviction, it can seem confusing and overwhelming. This is a breakdown of the process, just to give the average person a sense of how things proceed in this forum, specifically in Cook County, IL.

NOTICE

Notice is a main part of many legal proceedings and evictions are no exception. All evictions begin with the landlord or the landlord’s agent giving the tenant notice. Notices can be very informal and do not need to be notarized. The notice period begins the day you receive the notice (e.g. if you are out of town and come back on the 15th to see a notice inside your door dated for the 1st, the effective date of service is the 15th, not the 1st).

The vast majority of evictions begin with a five, ten, or thirty day notice. Five day notices are for non-payment. Ten day notices are for breach of a lease term (e.g. having an unauthorized occupant or criminal activity on the property). Thirty day notices are for end of term (i.e. the lease is over). The landlord cannot file until the notice period ends.

SERVICE

Once a landlord or its agent files suit, the tenant must be served. In a large county like Cook County, service must be attempted once through the Sheriff’s office before one can use a private individual, or special process server, to serve service of process. The landlord must make good faith attempts to serve the tenant personally in the lawsuit. That process usually takes about four to six weeks. If the landlord wants a money judgment in an eviction claim, they must obtain personal or substitute service on the tenant. Service is effective when it is had on either the tenant personally or someone who lives in the tenant’s home above the age of thirteen.

If the landlord makes good faith attempts with both the Sheriff’s office and a special process server but is unable to effectuate service on a tenant, then the landlord may go forward by what is called “posting.” Posting is done by literally posting the notice in certain public buildings and mailing a summons and complaint to the tenant. If the tenant does not appear in court on the posting date, the landlord can get a judgment against the property only (also called and “in rem” judgment) without the tenant being present.

COURT

Court proceedings in eviction court are somewhat casual and many parties represent themselves. The landlord has the burden of proof. The landlord has to prove a few things:

1. The have a superior right to possession of the subject property
2. Proper notice was given
3. The tenant unlawfully withholds possession
4. There is money due (if applicable)

There are usually only a few valid defenses that a tenant may present that are a complete defense to an eviction claim:

1. Notice presented is improper or was not properly served
2. If the eviction is based on a non-payment claim, no money is actually due
3. The landlord is retaliating against the tenant for complaining about subject property conditions or exercising another legal right

EVICTION ORDER

If the landlord is successful proving its case in court, it will receive and Eviction Order. That order is usually “stayed” one or two weeks, depending on the judge’s discretion and may or may not have a money judgment attached. After the stay date, the landlord may place the order with the Sheriff and this gives the Sheriff authority to evict. The Cook County Sheriff is extremely overloaded and evictions usually run four to six weeks behind. The sheriff will usually send a final notice, but the sheriff does not tell anyone but the landlord or its agent when they are coming.

EVICTION

When the eviction actually takes place, the Sheriff comes to the residence, removes all of the occupants with only a few personal belongings, and changes the locks. Only the Sheriff can perform the eviction. When this happens, tenants find that all of their belongings are now stuck inside a residence they no longer have keys to. This is a horrible situation because now you have to negotiate with a landlord that likely hates you to get all of your things back. There is very little protection for a tenant against property damage and theft in these cases.

* I hope this helps all of you with any questions you might have. Always feel free to contact me with any questions.