All official court processes against a resident by creditors automatically are stayed when a resident files for bankruptcy. The automatic stay prevents “any act to obtain possession of property of the estate.” This includes any proceedings initiated by owners or operators. The resident/debtor’s possession of an apartment is considered property of the estate, even if the resident/debtor is holding over. (11 U.S.C. § 362(a)(3).) No official court order is needed to give rise to the stay. The mere filing for bankruptcy is all that is necessary. The stay continues until the bankruptcy case is closed or dismissed or the court grants or denies a discharge, whichever is earlier.  (11 U.S.C. § 362(c).)

On request by the owner or operator and typically after notice and a hearing, the bankruptcy court may lift the stay for property rented by the resident/debtor. (11 U.S.C. § 362(d).) If the court reasonably determines that the resident/debtor will prevail in the hearing(s), it will keep the stay in place. (11 U.S.C. § 362(e).) However, if relief from the stay is necessary to prevent irreparable damage to the owner or operator’s property, the court may grant relief before notice and a hearing. (11 U.S.C. § 362(f).)

Owners and operators may have available state eviction rights based upon post-petition breaches even though pre-petition breaches were stayed. In any event, once a court lifts or dissolves a stay, the owner or operator may pursue eviction to regain possession through Indiana’s eviction procedures.