When you’re facing financial challenges, one of the scariest prospects is losing your home due to unpaid rent. Once you miss a payment, your landlord can start taking steps towards eviction. If you want to stay in your home and stop eviction, you might start to question what you can do. Can filing a Consumer Proposal or Bankruptcy stop an eviction process once it’s started? Do you have other options?
In this article, we answer these questions and give best practices to prevent an eviction.
What is a Consumer Proposal?
A Consumer Proposal is a formal debt relief solution that can only be administered by a Licensed Insolvency Trustee (LIT). In a Proposal, you work with your LIT to create an offer to pay your creditors a percentage of your debt, extend the time you have to pay, or both.
What is Bankruptcy?
Bankruptcy is a legal process that can help eliminate many of your unsecured debts to give you a fresh financial start. In exchange, you have to sell some of your assets to repay your creditors. As with a Proposal, a LIT is the only debt professional who can administer a Bankruptcy.
Will a Consumer Proposal or Bankruptcy Stop an Eviction?
No, filing for a Consumer Proposal or Bankruptcy does not stop an eviction. But exactly how a Proposal or Bankruptcy impacts an eviction depends on whether your landlord has already obtained an eviction order.
If your landlord has obtained an eviction order because you’re behind on rent, filing a Consumer Proposal or personal Bankruptcy will not stop the eviction process. However, any rent arrears (unpaid rent) accumulated before filing can be included as unsecured debt in a Proposal or Bankruptcy. This means you’ll only have to pay a percentage of your rent debt in a Proposal, and it will be eliminated in Bankruptcy.
Filing for a Proposal or Bankruptcy before your landlord has obtained an eviction order might help you stall the eviction process. This is due to the automatic stay of proceedings which goes into effect as soon as you file for a Proposal or Bankruptcy.
What is an automatic stay of proceedings?
An automatic stay of proceedings prevents unsecured creditors from taking legal actions to collect their money once you file a Proposal or Bankruptcy. Legal actions can include:
- Wage garnishment
- Collection calls
- Lawsuits
The stay of proceedings also prevents landlords from collecting rent arrears that were due before your filing date.
To sum it up: While filing can help protect you from legal actions taken by your creditors, it can’t stop them from evicting you. Your landlord is not obligated to keep renting to you if you aren’t making your payments on time.
Can a Landlord Evict You for Filing a Proposal or Bankruptcy?
If you haven’t missed a rent payment but you decide to file a Proposal or Bankruptcy due to financial issues, your landlord can’t evict you just because you filed.
According to the Bankruptcy and Insolvency Act subsection 84.2 (1), your landlord can’t terminate a contract due to Bankruptcy, as long as you keep paying your rent on time. Subsection 84.2 (2) states that your landlord can’t terminate your lease due to unpaid rent before you filed for Bankruptcy.
What is the Eviction Process in Canada?
There’s no Canada-wide eviction process. Evictions are governed by different government departments or ministries in individual provinces and territories, and the rules can vary.
For example, in Alberta, it’s your duty as a tenant to pay rent when it’s due. If you fail to do so, you’ve committed a breach of the residential tenancy agreement.
In this scenario, your landlord can give you a 14-day notice to terminate your tenancy. If you pay on or before the termination date given in the notice, you won’t be terminated.
Your landlord can also apply for an order terminating your tenancy from the Residential Tenancy Dispute Resolution Service or the Alberta Court of Justice.
In British Columbia, if you fail to pay your rent on time your landlord can serve you with an eviction notice. Your landlord must provide a specific amount of time before the eviction takes place and also has to give you time to dispute the notice.
For instance, your landlord has to give you 10 days’ notice, and you have five days from the date you receive it to dispute the notice.
To prevent any major surprises, familiarize yourself with your renters’ rights in your province, and any eviction laws.
Can You Stop an Eviction?
If you’ve missed your rent payment but haven’t received notice of an eviction order, reach out to your landlord as soon as possible to see if you can make an arrangement.
If you’ve received a notice of eviction, you can typically stop the eviction by immediately filing a dispute and paying any rent arrears before the given deadline. If you can’t afford to pay your rent, you can speak to a Licensed Insolvency Trustee to better understand your options.
Find Financial Relief: Speak to a Licensed Insolvency Trustee
If you want to avoid eviction but you don’t have the money to cover your missed payments, speak to a Licensed Insolvency Trustee at Allan Marshall & Associates. A LIT can review the debt relief options available and help you find a solution to your debt problems.
For a free no-obligation consultation, reach out to our office at 1-888-371-8900 or complete our online contact form.
