Bankruptcy Stay Vacated

After tenant's lease expired on Dec. 31, 2011, landlord started an eviction proceeding against tenant. In March 2013, the housing court ruled for landlord but stayed eviction for six months until September 2013, provided that tenant pay use and occupancy and $40,000 in attorney's fees. Tenant didn't seek a stay or perfect an appeal in state court. Instead, she filed for bankruptcy in federal court. Tenant certified that she should be permitted by law to cure her rent default.

Landlord objected, and the bankruptcy court ruled for landlord. The bankruptcy code terminates the automatic stay of residential eviction proceedings where landlords have obtained a prepetition judgment of possession. But the code provides a safe harbor from eviction if the debtor-tenant certifies that circumstances exist under applicable non-bankruptcy law that would allow the debtor to cure the default and the debtor deposits with the court all rent due to the landlord within 30 days following the bankruptcy filing.

Here, the tenant can't certify that there are circumstances that would permit her to cure the entire monetary default, because the judgment of possession arose from tenant holding over after lease expiration, not a non-monetary default. And tenant didn't deposit with the court the required rent in a timely manner. Tenant attempted to submit a check made payable to the bankruptcy court clerk. But she was required to make the check payable to landlord. Tenant also didn't file a copy of the judgment with the bankruptcy court. 

Index No. 12-13208, 2013 WL 5818558 (SDNY Bkrptcy Ct.; 10/29/13; Lifland, J)