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Can Bankruptcy Stop Evictions and Foreclosures Once the Moratorium Ends in Arizona?

Our experienced bankruptcy attorney in Tucson, Eric Ollason, Attorney at Law, has been keeping a close eye on the local, state, and federal government eviction and foreclosure moratoriums that went into effect in Arizona and across the country in response to the COVID-19 pandemic in March 2021.

The hardships that were felt nationwide because of the coronavirus prompted lawmakers to introduce the American Rescue Plan Act of 2021 that included a temporary stop in eviction or foreclosure procedures in certain areas, for specific types of loans.

The initial eviction and foreclosure ban expired on July 31, 2021.

Within days, the Centers for Disease Control and Prevention issued a new eviction and foreclosure moratorium that would last until October 3, 2021.

It will cover areas where 90% of the U.S. population lives, temporarily halting evictions and foreclosures in counties with “substantial and high levels” of virus transmissions.

The ban announced on August 3, 2021, could help keep millions in their homes as the coronavirus’ delta variant has spread and states have been slow to release federal rental aid.

However, the fix may only be temporary.

President Biden has been warned that if the new ban is challenged in court, it may not stand up to legal pressure.

Should it remain in effect, October 2021 will bring a new wave of mass evictions and foreclosures throughout Arizona and the rest of the country.

The good news is, financial relief may be available through appropriate bankruptcy filings that may help residents avoid evictions or foreclosures once the moratorium ends.

Here is how.

How Do Evictions Work in Arizona?

Arizona renting and leasing laws state that a property owner must give tenants notice they are being evicted through a document outlining the time in which they can make their circumstances whole and remain on the property.

Typically, an eviction notice demands the tenant pay the past due rent, comply with their leasing regulations, or move within five days of its receipt.

If the tenant does not respond, the property owner can proceed with filing eviction papers at the end of five days.

Can Bankruptcy Stop Evictions in Arizona?

The short answer is, it depends on when you file for bankruptcy.

The Bankruptcy Abuse Prevention and Consumer Protection Act prevents property owners from issuing eviction notices for individuals or families that have filed bankruptcy by awarding the tenant with an automatic stay.

However, the property owner may proceed with a request to the court to void the stay and proceed with the eviction.

There may be nothing you can do to delay the eviction process once the notice has been given, even if you file bankruptcy the same day it arrives.

If you are facing eviction once the moratorium ends, it may be wise to start making plans well before the October 2021 deadline, especially if the ban is reversed in court before then.

Contact our skilled bankruptcy attorney in Tucson, Arizona today to immediately assist you in solving your housing problems and overcoming your financial distress.

How Do Foreclosures Work in Arizona?

Homeowners in Arizona have rights and must be provided with loss mitigation opportunities by their mortgage lender who also must account for each step of the foreclosure process and abide by all applicable laws.

In an Arizona foreclosure, homeowners should be afforded the right to:

  • Receive a pre-foreclosure breach letter
  • Be notified by phone and mail regarding loss mitigation options, including a loan modification, forbearance, or repayment plan
  • Get notice of the foreclosure sale
  • Bring the loan current and stop the foreclosure sale
  • Pay off the loan to prevent a sale
  • Receive special protections if the homeowner is in the military

If you are worried that you will still be in jeopardy of losing your home once the foreclosure moratorium is lifted, contact our skilled Tucson bankruptcy attorney today to learn about the alternative options that may be available for your unique financial needs.

Can Bankruptcy Stop Foreclosures in Arizona?

If you are facing a foreclosure in Arizona, filing for bankruptcy might help.

Once you file for bankruptcy, an automatic stay goes into effect, functioning as an injunction that temporarily prohibits the lender from foreclosing on your home or otherwise trying to collect its debt.

Filing for Chapter 7 bankruptcy may provide more time to catch up on your mortgage payments by extending the foreclosure for months.

Filing for Chapter 13 bankruptcy may provide the answer to saving your home altogether.

Whether you are leasing, renting, or have a mortgage that may be affected by the moratorium ending, contact Eric Ollason, Attorney at Law, our experienced bankruptcy attorney in Tucson, to learn more about your legal rights and options to stay in your home by calling (520) 791-2707 to schedule a free consultation today.

 

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